We started reading Jennifer Taub’s book on white collar crime–Big Dirty Money: The Shocking Injustice and Unseen Cost of White Collar Crime–on the December 2020 day that President Trump announced pardons for Paul Manafort, Roger Stone, Charles Kushner and 26 other mostly white collar criminals. Coincidentally, Taub begins her book noting that:

Just after Valentine’s Day in 2020, President Donald Trump granted clemency to a slew of affluent felons. Their offenses? Bribery, investment fraud, tax evasion, Medicare fraud, public corruption, computer hacking, an extortion cover-up, money laundering, conspiracy to defraud the federal government, obstruction of justice, mail fraud, wire fraud. No white collar criminal left behind.

Taub’s book notes that white collar crimes cost victims an estimated $300 billion to $800 billion per year, a huge multiple of the costs of street-level property crimes (around $16 billion annually). It also notes a nearly unlimited number of situations where blue collar criminals had the book thrown at them while often white collar criminals whose crimes were staggeringly larger were gifted very light treatment by the criminal justice system. Taub wonders why there are minimum sentences for many of the sorts of federal offenses that blue collar criminals commit, but not for those commonly committed by white collar criminals. To her credit, she points out how the two-tiered system of justice we have contributes mightily to the overall level of inequality in our society.

Taub has harsh words for President Obama’s attorney general, Eric Holder, who acted as though criminal charges were not a realistic option for the hundreds if not thousands (or tens of thousands) of individuals in the real estate and financial industries who caused the Sub-Prime Mortgage Meltdown of 2007-2008 and the ensuing Great Recession. (One minor figure was nailed.) She is even less kind to the Trump Administration which by legal changes, prosecutorial decisions, Presidential pardons, and other actions made America a much safer world in which to be a fraudster, embezzler, and tax cheat.

Our interest, as always, regards whether behavioral ethics concepts can help explain why people commit white collar crime and how our society reacts to it. It seems to us that behavioral ethics can offer at least a few insights.

Why do people commit white collar crimes? Part of the reason is, of course, the self-serving bias. There’s just so much money to gain and so little risk of loss. Astonishingly, those whose income is in the top 1% are no more likely to be audited by the IRS than their fellow citizens who make less than $20,000 a year. More than $800 billion a year is slipping away from the federal government’s coffers due to tax fraud that is seldom punished. Even people who think of themselves as good folks are more likely to cheat when they know that they are not being watched in any meaningful way.

There are also huge riches to be gained through insider trading, securities fraud and manipulation, and all manner of financial skulduggery. There is certainly some self-selection going on here. Some people choose a finance profession because their relaxed moral attitude matches nicely with the opportunities the finance field presents. Others are just greedy. But we suspect that a substantial number are simply smart, driven people who think of themselves as winners and find themselves in a contest where winners are determined by dollar signs and too few people find it disqualifying that you might have cheated to end up with that huge mansion, the vacation home on Maui, and the Ferrari. Many studies indicate that when money is a constant consideration in our lives, moral factors tend to fade away. That ethical fading can cause even relatively well-intentioned people to make poor moral choices.

Taub herself cites what we call the conformity bias. She quotes the father of the concept of white collar crime, Professor Edwin Sutherland:

The hypothesis he settled on was that crime is learned. Through relationships with others, future offenders learn motives, values, techniques, and rationalizations. He set it out starkly: “Those who become white collar criminals generally start their careers in good neighborhoods and good homes, graduate from college with some idealism, and, with little selection on their part, get into a particular business situation in which criminality is practically a folkway, and are induced into that system of behavior.”

The same is true for street-level criminals as well, though they are introduced to a different situation. Professors Pierce and Snyder found that individuals inside business organizations tend to reflect the conduct around them, and their adherence to moral principles will get stronger if they are working in a unit where that is the culture, but fade away if they are transferred to a unit with lower adherence on display. Most major investment banks, as an example, have such a track record of criminality over the years that one can easily see how Sutherland’s hypothesis might well apply to any who go to work there.

As one gains more money and more power, a sense of entitlement can arise that may convince people that they deserve the rewards they can garner through fraud and other white collar wrongdoing. In one experiment, psychologists divided cars into 5 categories, running from the cheapest and crappiest to the best and most expensive. They then monitored an intersection in California where pedestrians have the right of way to see what would happen when a pedestrian entered the cross-walk as cars approached. Every driver of the lowest category of cars yielded to the pedestrian. In the middle category, 30% cut off the pedestrian. And roughly 50% of the drivers of the fanciest cars broke the law and refused to defer to the pedestrian. Wealth breeds entitlement which breeds wrongdoing. “Extreme wealth is criminogenic,” says Taub.

And because of the concept known as the tangible & the abstract, it is easier to commit and rationalize most white collar crimes as compared to blue collar crimes, because the victims are not right there in front of the wrongdoer as they would be in a robbery, but are more of an abstract notion. As Taub writes:

We cannot simply rely on the good conscience of executives to do the right thing. For them, victims are invisible at best…White collar crime differs from violent crimes; for example, with violent crime it’s easy to see who the perps and the victims are in real-time, face-to-face encounters. When the crooked schemes are more complex, involving numerous players inside of a large business organization and taking place over a long period of time in many locations, finding the crime and the victims is fuzzier.

Professor Eugene Soltes of the Harvard Business School who developed relationships with many prominent white collar criminals and interviewed them in their jail cells reached a similar conclusion regarding the role of the tangible and the abstract:

White-collar crime is not like most other criminal offenses.  To steal someone’s wallet, you need to get close to that person, though their physical belongings, and see their harried reaction as they realize their wallet is gone. It is a physically intimate affair.  I spent a lot of time around convicted felons who had stolen many millions of dollars through their actions, but I never once worried about one of them reaching into my back pocket to steal my wallet.  As reasonably socialized individuals, they would have instinctively avoided such an offense.  However, for most white-collar crimes, the harm created by a dab of a pen or an adjustment on a spreadsheet does not require getting close to individuals.  The victims are physically and psychologically distant. In some cases, like insider trading, the victims might not even be identifiable.  As a result, perpetrators of white collar offenses do not experience the same gut feelings of doing harm that kept my interviewees from reaching for my wallet.

Why does our criminal justice system extend mercy to white collar criminals much more frequently than to blue collar criminals?  On the face of things, a poor person trying to make ends meet who commits a street crime seems morally more sympathetic than a comfortably well-to-do person who lies, cheats, and steals in order to become even richer, but that’s not what we see in our criminal justice system. Sympathy seems to be reserved primarily for the white collar criminals because they are most commonly white and financially comfortable and therefore have much more in common with the prosecutors and judges who generally run the legal system, as well as the governors and presidents who hand out the pardons. The in-group/out-group bias causes those who run the system to give any breaks disproportionately to those who look and/or live like them—the white collar criminals. Taub provides numerous examples of judges giving white collar criminals–who just happen to share their own skin collar, social class, or both–lighter sentences because the defendants’ conviction or guilty plea has already caused them to suffer significant reputational damage. And the big majority of the beneficiaries of President Trump’s pardons have also been the wealthy and well-connected.

Big Dirty Money is an insightful and discomforting book about white collar crime and its unfortunate impact on our society.



Cara Biasucci & Robert Prentice, Behavioral Ethics in Practice: Why We Sometimes Make the Wrong Decisions (2021).

John C. Coffee, Jr., Corporate Crime and Punishment: The Crisis of Underenforcement (2020).

Brandon L. Garrett, Too Big to Jail (2014).

Lamar Pierce & Jason Snyder, “Ethical Spillovers in Firms: Evidence from Vehicle Emissions Testing,” 54 Management Science 1891 (2008).

Paul Piff et al., “Higher Social Class Predicts Increased Unethical Behavior,” 109 Proceedings of the National Academy of Sciences 4086 (2012).

Eugene Soltes, “Teaching Versus Living: Managerial Decision Making in the Gray,” 41 Journal of Management Education 455 (2017).

James Stewart, “Getting Away with It: Why White Collar Crime is Rarely Punished,” New York Times, Nov. 29, 2020 (book review).

Jennifer Taub, Big Dirty Money: The Shocking Injustice and Unseen Cost of White Collar Crime (2020).

Kathleen Vohs et al., “Merely Activating the Concept of Money Changes Personal and Interpersonal Behavior,” 17 Current Directions in Psychological Science 208 (2008).



Conformity Bias:  https://ethicsunwrapped.utexas.edu/video/conformity-bias

In-group/Out-group:  https://ethicsunwrapped.utexas.edu/glossary/in-groupout-group

Self-serving Bias: https://ethicsunwrapped.utexas.edu/video/self-serving-bias

The Tangible and the Abstract: https://ethicsunwrapped.utexas.edu/video/tangible-abstract