Fajar Fawad
White collar crime as a unique form of illegal behaviour received significance in literary notes since Sutherland introduced the concept in his 1939 presidential address to the American Sociological Society. It is often not dramatic, exciting, or interesting to hear about, and many people don’t understand how white collar crimes actually can have its effect on economy. However, white collar crime-the violation of criminal law by a person of high socio-economic status in the course of occupational activity is now narrowly focused upon in the judgements of budget formation and economic analysis.
White collar crime is a widespread problem that doesn’t receive a lot of attention. Everyone knows what a murder, robbery, or rape is, and can process these emotional events that evoke feelings of anger, disgust, and sadness within people of all ages and classes. Unfortunately, white collar crime does not have this same reaction. Securities fraud or corrupt loans do not stir up feelings of rage and disappointment in most people instead of increase feelings of confusion. This often means white collar crime does not receive a big focus, both in the media and when crime prevention budgets are formed.
At the same time white collar crime is not receiving a proper focus and budget, its 
true cost is not being measured. There are huge ripple effects that stem from a white collar crime, such as job loss, stock price drops, consumer price increases, court costs, and jail time after conviction, never mind the actual cost of the crime itself. All of these ripples are extremely costly and after extensive research it is not clear they are not being fully accounted for in the total cost of white collar crime. It is difficult to comprehend the sheer number of people impacted by white collar crime, as well as the colossal monetary impact on business and society.
The total cost is probably much higher than measured since it is so challenging to put a price on some of the ripple effects. Although impossible to truly capture the total cost of white collar crime and all aftereffects from it, the full impact on business and society is masive and warrants a more proportional resource allocation going forward.
The most common white-collar offenses include antitrust violations, computer and internet fraud, credit card fraud, phone and telemarketing fraud, bankruptcy fraud, healthcare fraud, environmental law violations, insurance fraud, mail fraud, government fraud, tax evasion, financial fraud, securities fraud, insider trading, bribery, kickbacks, counterfeiting, public corruption, money laundering, embezzlement, economic espionage and trade secret theft.
Now that it is evident white collar crime exists, but is not receiving equal media attention or as much of a budget as it deserves, and costs Pakistan a huge sum of money each year, it is time to focus on what actually goes into this total cost of white collar crime.
The amount of money that white collar crime costs each year is astronomical, but that number is not making a big enough effect on people. This section of the paper attempts to analyze some of the major ripple effects of white collar crime and perhaps make it a little easier to understand why it is so expensive, and why there needs to be a bigger focus on prevention. Overall, it is unclear if the FBR is taking
into account all ripple effects related to fraud once these criminals once convicted. The government is most likely only looking at the money lost due to the actual fraud or counterfeiting event, without looking at some of the ripple effects that happen after the fraudulent even occurs. Regardless, these areas need to be studied and understood if Pakistan hopes to prevent future white collar crime.
Economic crime is one of the most serious crimes endangering the national security and public safety of any country. It is directly associated with legal, political, social, human rights and development issues. In particular, economic crime harms Third World countries such as Pakistan where poverty is prevalent and the economy is poor and supported by foreign aid and loans.
White-collar employees like higher government officials and businessmen play a key role in creating and increasing economic crimes, namely corruption, embezzlement and fraud, all over the world. It is therefore important that any form of economic crime is identified and punished severely, by appropriate prison terms according to the seriousness of the offence.
By applying these kinds of penalties to economic criminals, the rate and frequency of economic crime can be minimised and, simultaneously, pave a way to the fundamental practices of democracy, government transparency and the dominance of the rule of law in the country.
It remains prudent as a forensic psychologist to explain the effect of corruption in Third World countries and ways in which it can be combated, in particular by the imposition of heavy penalties on those who choose to commit economic crimes in Pakistan. It is argued that this must be done to protect human rights, to bring about political and social stabilisation, to ensure effective and even distribution of national wealth and, eventually, to secure democracy and sustainable development.
Capturing the true cost of white collar crime is impossible, but by studying the ripple effects that occur when a corporate crime is committed, it is clear that more resources need to go towards preventing the crime from happening because the after effects on business and society are devastating. In no way does this mean the effects of blue collar or violent crime are not disastrous or should have resources taken away from them; simply that white collar crime has such a great impact that it cannot be ignored.
When a blue collar crime is committed, close family and sometimes the surrounding community feel the effects, however when a white collar crime is committed the effects can be national, or even global. Job loss, stock price drops, jail time, court costs, and consumer price increases occur, costing billions of dollars. It is dangerous to society when these things happen. Each ripple effect can cause even more ripple effects, creating a spinoff that never ends. This makes it extremely challenging to quantify a single white collar crime, never mind an attempt to quantify white collar crime for the entire nation. The facts are evident; white collar crime is costing Pakistan millions and becoming dangerous to business and society.
Pakistan faces many economic challenges. Resources investment is falling sharply, major closures are occurring in manufacturing and many trade-exposed companies face severe pressures from a stubbornly low fuel shortage supply. Employment growth has been sluggish for some time, with hours worked rising by only about 1 per cent per year for the last five years. It is much more likely now that consumer spending will slow as sentiment falls, compounding rather than off-setting the impact of falling resources investment and manufacturing closures. If the economy does slow further this will not only hurt many individuals and families but also eliminate the government’s prospects of reducing the budget deficit. How did we come to this parlous situation, and what can be done about it? The government is clear that we face a national crisis in terms of deficits and debt, and that budget repair must take priority. With inflation having such a massive impact on society it is crucial to prevent huge scandals from happening in the future and keep the financial volatility that comes with white collar crime to a minimum. Nothing will be worse for the economy, nor for the government, than a long period of uncertainty, stretching into 2014-15.
The writer is a Forensic Psychologist. Email: fudge_fawad54@hotmail.com
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