A Typology of Profit-Driven Crimes

4. Implications for the Criminal Justice System

The typology suggested has interesting implications with respect to definitions of offences, prioritization of harm, division of responsibility for complex actions, limits to growth of criminal activities, and alternative control measures.

This typology not only aids classification, but can be useful in questioning whether or not something really should be a crime at all. Take, for example, insider trading. Insider trading is not a predatory crime – it does not involve the forced transfer of property. It is not a market-based crime – the object of the exchange, securities, is perfectly legal. It is not even clearly a commercial crime – to trade on privileged information in order to capture profits from market movements which take place for independent reasons is quite different from rigging a market to make it move in a particular direction. With insider trading there is no victim in the proper sense. What is at issue is not a contest between predator and target over forcibly or fraudulently redistributed wealth, but a quarrel between two sets of investors over distribution of profit, the kind of thing sensibly left to the civil courts to sort out. With stock markets as with race tracks, it should never be forgotten that insider tips can provide an advantage but, unless combined with painting the tape (i.e., buying and selling among the same investors for the sole purpose of inflating trading activity in order to draw attention to the exchanged security/ies) or doping the horse, can never guarantee the results. (See Appendix IV for more details.)

The typology is also useful in judging seriousness. It makes clear that it take two to commit a market-based offence – there can be no market unless there is a supply side and a demand side. Therefore there is no victim in any normal sense – that is why it is common to allege that the real victim is "society," a phrase that is essentially meaningless. On the other hand, with predatory and commercial offences, there is an unwilling or a duped victim. Furthermore, while in a commercial or predatory crime, the "supplier," so to speak, takes the initiative, illegal markets are clearly demand driven. Therefore, in an illegal market transaction the customer is, in a sense, guiltier than the supplier – though the criminal justice system works on precisely the opposite assumption. Thus, the typology also suggests that purportedly nasty crimes like trafficking in drugs, which involve fair market exchange, are in a fundamental way cleaner than supposedly less malign ones like telemarketing fraud where unsuspecting people are ripped off. Yet the punishments are meted out in reverse order.

Furthermore, the typology permits the deconstruction of an act into a series of constituents, which better illustrates the chain of responsibility and the flow of command. This is the case, for example, with auto theft. While "joy-riding" involves a purely predatory act, sale of stolen cars might fall more into the predatory or the market-based category depending on the sequence. Sometimes cars are stolen, and the thieves attempt subsequently to sell them – with no prior guarantee of success or of price in the event of success. (Most such cars probably end up in chop shops.) Such an act should likely be seen more as predatory because the sale was a secondary part of the process both in sequence and in apparent motivation. However, in more sophisticated operations, cars are stolen to order, with payment terms pre-negotiated. In this instance the market-based crime precedes and creates the need for the predatory act. Use of the typology then permits isolation of, not just the sequence, which is more or less in the nature of things, but the driving force (no pun intended) behind a crime like auto theft.

Another obvious advantage is clarity of meaning. It gives a substitute for sloppy categories like economic crime, business crime, commercial crime, white collar crime, etc., which are poorly defined, if not indefinable, and often confuse acts with actors. It lays the stress on what makes crime different, rather than giving the illusion that there is in the outside world a catch-all category of "crime" committed by a readily definable subset of evil beings.

Yet another advantage is to shift away from technological fetishism – terms like telemarketing fraud, computer-assisted crime, etc. In fact it suggests that even terms like credit card fraud might best be avoided. As demonstrated, what takes place in credit card offences is a series of distinct acts – from theft to business fraud. This is a widespread problem with popular nomenclature. A term like intellectual property crime, for instance, when dissected according to this terminology, would appear to consist of acts of theft, underground trafficking, and commercial misrepresentation, all of which are confusingly lumped together in a common category, a procedure which surely makes understanding, not to mention the evolution of effective preventive and deterrent policies, more difficult.

The optimist might add that such a terminology might provide some guide to drastically simplifying the existing criminal code which is a bizarre amalgam of overlapping offences, some so arcane as to be ridiculous. Alas, given the complexity and costs of such an enterprise, this hope remains idealistic.

At the same time, it must be stressed that this typology is useful primarily in revealing salient economic characteristics. These are certainly not the only things that should be understood about crimes. There are a range of social factors, including those pertaining to motivation (profit is never a sufficient explanation) that are obviously relevant. Furthermore, different terms can be used to highlight different characteristics which might be relevant for different purposes. Thus, as noted supra, the term environmental crime is useful in so far as it points towards a class of acts directed against the biophysical environment. But when an economic typology is employed, actual offences can fall into any of the three categories. Poaching is clearly predatory, although any subsequent sale of the results fits the market-based category; trafficking in CFCs, a regulated (in some places, banned) commodity, is a market-based offence; while illegal dumping of toxic waste falls into the commercial category. When this typology is used, the stress falls on capturing the economic nature of the action, not necessarily all of the social consequences.

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