Abstract
Vincenzo Ruggiero has written another erudite, cultured, and urbane treatise on the crimes of finance. Among his numerous writings on economic crime, the two most recent book-length treatments, The Crimes of the Economy: A Criminological Analysis of Economic Thought (2013) and Dirty Money: On Financial Delinquency, the text reviewed here, have coalesced in this reviewer’s mind and imagination to make Ruggiero the premier scholar of criminology writing on the subject today.
At the very end of his Introduction, Ruggiero writes: After reading this text for the umpteenth time, I feel humiliated, hurt in my identity as a critical scholar; I am infuriated for I am forced to put my ‘radicalism’ or ‘extremism’ in perspective. The reality of financial delinquency is far more radical and extreme than any member of the critical criminological community. (p. 8)
While this reflexive statement on radicalism, academia, and dirty money cannot be challenged by the availability of political or social evidence, it does not apply to the actual contributions that Ruggiero has made to the field of economic crime.
For my money, when it comes to analyzing or diagnosing the crimes of finance, Ruggiero is the “philosopher king” of our times. His significant gifts for making sense not only of the fields of white-collar and corporate crime, but also of the intellectual history of criminology, should earn him academic influence on par with Beccaria, Bentham, Bonger, Sutherland, and Geis.
In this book, Ruggiero explains how dirty money and financial delinquency become instruments for the production of harm and victimization. Dirty money refers to “the illegitimate appropriation of financial resources by individuals and groups holding expert knowledge and, often occupying positions of power” (p. 2). Financial delinquency, by contrast, refers to the social problem of mixing the accumulation of licit and illicit capital without state power willfully controlling or separating these two forms of money acquisition.
Of equal importance, Ruggiero examines how philosophers, theologians, and especially criminologists—over time and up to the present moment—shape our discourse and understanding of the causes and consequences of these financial harms and injuries. Between the Introduction and the Conclusion, Ruggiero scrutinizes both the crucial episodes of financial crimes and the societal reactions to these events. As he moves through history, Ruggiero also explores the workings of capitalism.
In chapters two, “Money and Salvation,” and three, “Between Sin and Crisis,” the journey begins within the long-standing tradition of Christianity, taking us from “a notion of money as a repugnant signal of greed and an obstacle to salvation to an important tool for securing salvation itself” (p. 4). In his opening narrative, we learn of St Francis’ apathy or indifference to money, Aristotle’s abhorrence of moneymaking for the sake of making money, and Augustine’s religious pragmatism concerning both financial trading and the world of negotiation. During early capitalism and well into 17th-century Holland and the era of “tulip mania,” Ruggiero reveals how the love of money over time has repeatedly erupted into financial crises. He pivots next to a discussion of those economic bubbles and bursts in both Paris and London at the turn of the 18th century. By the end of chapter three, we have moved away from Christian consciousness and toward rational utilitarianism with an overview of the examinations of luxury, usury, and the crimes of money pursued by Beccaria and Bentham. Their discussions were in relation to questions of moral ethics or the challenges of capitalism as well as to the dilemmas presented by free markets. Despite the recognition of unproductive economic conduct, idiocies, and the abuse of trust associated with financial crime, these early classical criminological analyses were less about human behavior or the laws of capitalist accumulation and more about the alleged “criminogenic” nature of accidents and calamities.
In chapter four, “Bankers and Robber Barons,” Ruggiero moves his analysis of dirty money and financial crime to the United States. He discloses how the euphoric initiatives of 19th-century investors, captains of industry, and financial crooks led to both bankruptcies and fraud, where guilt was often assuaged or “purged through the exercise of charity” while blame was typically cast downward onto those “smaller dealers or petty embezzlers” (p. 5). At the same time, this is the period when criminology was developing into its own field of study and was busy carving out the newer areas of statistical, positivist, and motivational criminology. Accordingly, we hear from such disciplinary pioneers as Quetelet, Lombroso, Ferri, and Tarde on these financial delinquencies.
In chapter five, “Black Tuesday and Beasts of Prey,” Ruggiero takes us through the crisis of 1929, the Wall Street crash, and the way in which “fraudulent schemes, mingled with innovative strategies” created “openings for swindlers and adventurers” (p. 5). It is during this period that the concept of “criminaloid” introduced two decades earlier by the sociologist EA Ross begins to resonate, and the concept of “coprophilia” to rise along with the psychoanalytic school. Inadvertently, the latter returns us “to the medieval association of money with the excreta of the devil” (p. 5). There are also the influences of the Chicago School, especially Sutherland’s critique of the law in general and of corporate crimes lying beyond the criminal law in particular, as well as his introduction and establishment of white-collar crime. Finally, there is Bonger’s critique of capitalism, avarice, and egoism, as well as his view that these economic crimes are not pursued by the capitalist state because they do not pose sufficient threats to the social order.
In chapter six, “Incompetent Muddlers and Organization Men,” Ruggiero suggests that in the aftermath of the Second World War, there was less of an interest in financial crime than in the years following the crash and up to the war. Nevertheless, the focus turns to the often-neglected crimes associated with the Marshall Plan and the New Deal. In addition, attention is given to the Eurodollar crisis and to the early progenitors of offshore accounts and financial markets. From the 1950s to the 1970s, we hear from an increasing number of voices, including Cressey, Schur, Clinard, Geis, Pepinsky, and others, representing the fields of psychology, sociology, and criminology. By the end of the 1980s, during the 1990s, and up to the present, Ruggiero argues there is a rising or swelling of public consciousness concerning both financial and economic crimes. It is by the beginning of the 21st century, however, that the principles of economics or free markets are now accorded the statuses of “scientific” and “sacred” as both are asserted into public consciousness.
Chapters seven, “A Paper World” and eight, “Psychopaths and Thrills,” cover those years in the United States where there was a proliferation of financial delinquencies. The economic landscapes are dotted with one scandal after another: Drexel, Milken, Maxwell, Leeson, the Savings and Loans debacle, the Bank on Credit and Commerce International, WorldCom, Enron, Madoff, and the 2008 financial meltdown. During this period, the study of organizational crime begins to emerge, if not take off. Academics as well as investigative journalists are describing “networks of greed” involving bankers, politicians, and auditors. “Financial delinquents are deemed metaphors of our times, facilitated by suitable targets and a lack of capable guardians” (p. 6). The tools of criminality are now consisting of deception, abuse of trust, concealment, and secrecy. At the same time, corporate cultures as well as the social and economic structures are studied in greater depth than previously, while the financial system and Wall Street are increasingly viewed as some kind of gigantic Ponzi scheme.
In the post-regulatory period of eroded re-regulation, chapter nine, “Various Shades of Grey,” captures the world of shadow banking, derivative instruments, over the counter trading, money laundering, and bribing. Following the Wall Street implosion, there is also the intensifying struggle over regulation versus deregulation, exemplified by the passage of and resistance to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Chapter ten, “The Hidden Wealth of Nations,” tops off this examination of financial delinquency by addressing concealed wealth in the context of tax sheltering and/or tax evasion. Such crimes perpetrated by white-collar and corporate offenders alike include networks of clean and dirty money mixing it up, respectable operators working alongside respectable delinquents, and of course those zero-taxing countries as well as those tax havens for the rich.
In summation, Ruggiero has written another masterful treatise on economic and financial crime. However, this does not mean that the work is flawless or that his arguments are not subject to disagreement. For example, I take issue with his linear depiction of financial delinquencies moving from tolerable to intolerable. I am also left unsatisfied by his non-dialectical treatment of crime and punishment. That is to say, my own interpretation of 500 years of economic and financial crime is that these harms and victimizations have always been partially hidden or invisible as well as acceptable and tolerable, on the one hand. On the other hand, these harms and victimizations have always been visible or available in plain sight as well as unacceptable and intolerable (Barak 2012; Barak 2017).
In the past as well as the present, I would argue that these financial crimes have rarely been criminally sanctioned. Moreover, if we are living today—as Ruggiero concludes—in an age of overwhelming intolerance and unacceptability of financial crimes, then please explain to me why, with the exception of 26 bankers in the small country of Iceland who were criminally charged, convicted, and sentenced to prison for securities fraud, there have not been any other bankers confined in prison, considering the thousands who were also engaged in identical behavior as the bankers from Iceland?
Simply stated, these financial delinquents find themselves beyond incrimination not because of any absence of criminal wrongdoing or even criminal intent. They find themselves free to commit a myriad of securities frauds and other financial crimes because of conscious decisions made by the departments of justice throughout the globally developed world not to prosecute or criminalize these offenses. In short, and consistent with Bonger, I would argue that these economic fraudsters remain outside the confines of the criminal sanction because the political economy of crime and crime control tolerates, accepts, and otherwise normalizes these behaviors. As for the perpetrators—individual and corporate—of these financial crimes, they are part and parcel of a financial culture and a network of banks, algorithms, and an epidemic of securities fraud that could, but have (and will) not be subject to the penal law. In other words, despite the various myths to the contrary, especially the ones associated with “Too Big to Fail or Jail,” the benefactors of dirty money and financial delinquency could indeed be prosecuted, convicted, and subjected to individual career and corporate death penalties.