White-collar, Blue-collar and Collarless

crime
Dr Robin Fletcher , Director f Programmes, Department of Criminology and Sociology, Middlesex
University

Abstract

Purpose

To explore the moral position of Baumol’s theory of productive, unproductive and destructive
entrepreneurship; Ross’s concept of the ‘criminaloid’; and Sutherland’s theories of white collar crime, as
applied to ‘street level’ entrepreneur.

Design/methodology/approach

Provides a theoretical framework of key texts that explore the concepts of morality, legality and ethics when
applied to the twilight world of street entrepreneurism and white, blue and collarless crime.

Findings

Provides a critical analysis of theories that advocate rule avoidance and evasion as an acceptable process of
developing successful entrepreneurs and the controversial theories of white collar crime that focus on ‘high
status’ actors operating at the corporate level. The relationship between clients (victims) and practitioners
are examined as key elements in the commission of deviant activities.

Originality/value

By combining philosophies of entrepreneurism and theories of white, blue and collarless crime through the
application of moral principles, this paper introduces a new construct of ‘positive’ outcomes that fly in the
face of criminal proceedings.

.Keywords: victimless, street entrepreneur, morality, deviance, white collar

Introduction

The 20th century was time of enormous social and economic change led by industrial and technological
developments that created opportunities for entrepreneurial development at the local, national and
international levels. The expanding capitalist markets became a playground for businessmen (and
women), who placed productivity, power and profit above, but not necessarily exclusive of, the traditional
values of honour, ethics and morality. It was a managerial revolution incomprehensible to ordinary
citizens who were seduced by opportunities to improve their economic, social and cultural capital, but
sometimes silver clouds have a lead based lining.

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Whilst the business sector revelled in the entrepreneurial opportunities that challenged, and in many
cases, changed the established rules of engagement, others saw acts of legal and moral deviance
committed by respectable members of the community, who abused their status and position of power to
enhance profit margins irrespective of ethical and moral cost. Economists, sociologists and more latterly
criminologists identified activities that operate in a twilight zone, where the rules of engagement can be
interpreted as both ‘legal’ and ‘illegal’; ‘moral’ and ‘immoral’; ‘ethical’ and ‘unethical’; ‘criminal’ and
‘non criminal,’ dependent upon the context and the philosophical position of the observer. Early 20th
century commentators developed theories that either condoned or condemned the activities of these high
status entrepreneurs. In this chapter Baumol’s (1990) theories of entrepreneurism and Sutherland’s (1949)
‘White Collar’ criminals will be examined in relation to ‘street level’ entrepreneurs, through the symbolic
representation of ‘white collar,’ ‘blue collar’ and ‘collarless’ criminals, to establish the validity of their
debates at the lower levels of business activity.

Entrepreneurs and moral deviance

We begin by examining the extended essay of Edward Ross (1907) who challenged the collapse of
traditional business ethics, as entrepreneurs competed with each other to maximise profit. Ross is
reluctant to identify these actors as criminals, instead condemns them for their lack of moral and ethical
behaviour and names them ‘criminaloids,’ a hybrid form businessman who may (some will say must)
break the rules of traditional business practice in order to achieve success. In his mind Ross saw a new
breed of entrepreneurs who had sunk into a pit of moral turpitude, hidden from public view merely
because of their social standing and were ‘lacking the familiar tokens of guilt’ (Ibid 9) as they expanded
their business empires. He complained the judiciary allowed this to happen because ‘In a swiftly changing
society the law inevitably tarries behind need, [and] public opinion tarries behind need even more.’ His
vision of business practice was posited in the the ‘old-style, square-dealing sort [of] grasshoppers’ (Ibid
49) who relied on no more than a handshake between men of honour, to seal a binding contract.

The criminaloid is more interested in ‘getting it done’ than ‘doing it wrong’ (Ibid 51) and even if caught,
will use ‘lawyerspun sophistries’ (Ibid 53) to ensure their image is not tarnished, adding to a persona of
invincibility. These actors seek wealth, power and success and are ‘in a hurry and .... are not particular as
to the means’ (Ibid 50). They believe they answer to a ‘higher law’ (Ibid 60), where business principles
take precedence over societal mores. This was an early treatise into the complex relationship of business
ethics, entrepreneurship, crime and quasi-criminality. It revealed changes in the moral conviction of
business and raised questions of anomie in the new enterprise culture. It also introduced the concept of
the victimless crime and questioned the level of illicit activity society should accept ‘for the greater
good.’

A more recent examination of entrepreneurial activities by the economist William Baumol (1990) tells a
similar, although he is less critical in his approach. His hypothesis of productive, unproductive and
destructive entrepreneurship examined the application of rules and their impact on productivity.
Challenging rules is an important part of an entrepreneur’s success, as Drucker noted (2002; 26) ‘the
overwhelming majority of successful innovations exploit change.’ However there remains a question of
moral and ethical standards. Smith and McElwee (2013; 47) acknowledge entrepreneurship as a ‘morally
ambiguous pursuit’ and that Baumol’s typology includes a range of behaviours ‘spanning a continuum
from illegal through to immoral and amoral actions that are not always illegal.’ Baumol (1990; 919)
seems to dismiss morality as an issue in his concluding paragraph ‘The overall moral, then, is that we do
not have to wait patiently for slow cultural change to find measures to redirect the flow of entrepreneurial
activity toward more productive goals.......it may be possible to change the rules.’ (Ibid 919)

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Criminaloid’s, Crime and White Collar workers

Thirty years after the exposure of the ‘high status’ businessmen, the phenomena was re-visited by Edwin
Sutherland (1940, 1949), a sociologist who, like Ross, had strong moral convictions (Geis 1991) and a
sense of injustice in what he perceived to be a biased criminal justice system that favoured the executive
class over the common citizen. He challenged the criminological thinking of the day, which assumed
crime was a problem of the lower classes, founded in conditions of ‘poverty, f eeblemindedness,
psychopathic deviations, slum neighborhoods, and "deteriorated" families’ (Sutherland 1940; 1). His
exposure of deviant acts among the managers, executives and others who held corporate positions of
power and influence was, in his mind, just as real as those perpetrated by ‘common criminals.’ He
surmised these activities had been ignored by criminologists because they failed to understand or
acknowledge the behaviour of ‘business and professional men,’ (Sutherland 1940; 2) as they were hidden
from view; difficult to study; involved powerful people and/or organisations; and any illicit actions were
difficult to define in terms of the criminal law. His new criterion of criminality was posited in social
status and employability and termed ‘white collar crime,’ a symbolic reference to the dress of the
managerial class.

He hypothesised white collar crime does not have to be tried in a criminal court to prove the actors are
criminals and argued precedents had been set for ‘real criminals’ to be tried by ‘administrative boards,
bureaus, or commissions, [where] much of their work, although certainly not all, consists of cases which
are in violation of the criminal law’ (ibid 6). He pointed out that whilst many of these cases could be dealt
with in a criminal court they are heard in civil courts so that victims can secure damages, rather than
inflict punishment. In such circumstances the white collar offender has been convicted of a crime, just not
in receipt of a penal sentence. This sociological approach was challenged by Jurists who argue only
persons convicted in a court of law, having broken a legally defined crime, can be considered a criminal
(Tappan 1947). An argument rebutted by Sutherland who insisted it is the actions of the perpetrators, not
how the courts deal with them that should decide criminality (Geis 1991; 14).

What is White Collar Crime?

In order answer this question we will consider two approaches, ‘offender led’ and ‘offence led’ both are
controversial. The ‘offender led’ construct, follows Sutherland’s definitions of ‘white collar crime’ as ‘a
crime committed by a person of respectability and high social status in the course of his occupation’
(Sutherland 1949; 9). Later amended to ‘a person with high socio-economic status who violates the laws
designed to regulate his occupational activities’ (Sutherland 1949a; 511). Both definitions suffer from the
same problem; they identify an individual and not the act and by using status exclude the lower socio-
economic classes, even if they break the same rules or carry out the same actions as those of the
‘respectable’ classes. Having argued crime is a ‘classless’ phenomena, it is difficult to rationalise the
exclusion of any class (Benson and Simpson 2009, 19 – 52), whether they are white-collar
(administrative), blue-collar (manual) or even ‘collarless’ (faceless internet actors) workers

In a review of these ambiguous definitions, Payne (2012; 26 – 29) argues they are conceptually vague and
‘only minimally reflects reality’ to which Friederick’s (2002; 243) adds ‘perhaps no other area of
criminological theory has been more plagued by conceptual confusion than that of white collar crime.’
This confusion is partially due to the fact that having identified ‘high status’ as a key component in his
definition, Sutherland includes non ‘high status’ activities, that could be described as ‘blue collar,’ in his
preliminary research. Perhaps even Sutherland was confused as to what he had uncovered and it is within
this confusion that illicit entrepreneurism flourish.

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The second approach to white-collar crime is via an ‘offence led’ construct, which is also restricted by the
above definitions, which determine illicit acts must occur as a result of employment. The assumptions
being they are acts of fraudulent misrepresentation intended to maximise profit for the corporation.
Sutherland’s ‘White Collar’ definitions have now become an umbrella term for a variety of illicit acts that
contravene criminal and civil codes of practise and because his definition is sociological rather than
legislatively driven, it is impossible to create a list of specific offences. In an attempt to categorise these
acts, Payne (2013; 30) assumed a moral position, analysing ethical violations of natural law. He identified
12 groups that ‘violate the principles of a particular culture, subculture or group’ which floows
Sutherland’s ‘Differential Association theory,’ that argues deviant behaviour is learned within the context
of group surroundings, where standards of behaviour are determined and approved, regardless of legality,
to ensure favourable outcomes. In other words it isn’t the activity that is the problem, it’s the getting
caught. An alternative approach was undertaken by Croall (2011; 338) whose categorisation is set within
a legislative framework that established four categories of ‘real’ crimes, irrespective of whether they are
dealt with through civil or criminal proceedings.

Regardless of whether a moral or legal approach is taken, these illicit acts have been separated into ‘the
two principle or ‘pure’ forms of white-collar crime’ (Friedricks 2002; 245), that of corporate and
occupational crime. This separation identifies the activities of the organisation as an entity and the
activities of an individual within that organisation, not acting for or in concert with the organisation. As
our attention is constantly drawn to the activities of larger corporations by a media happy to expose their
fraudulent, abusive or dangerous practises, particularly when they have a visible social impact, there is an
assumption white collar deviance is a trait of the powerful classes. It would be fair to state that
Sutherlands use of the phrase ‘high status’ and ‘respectability,’ began this pre-occupation with the
executive and management class, but such propositions are now recognised as invalid. Research has
established individuals commit white collar crime at every business level (Benson and Simpson 2009),
just not on the same scale.

Deviant actors not of ‘high social status,’ who own or manage a small/medium enterprise (SME), may
commit acts similar to the larger organisations (Shapiro 1990; Ruggiero 1996), although not necessarily
be for profit, but for survival. A fundamental difference of the ‘high’ and ‘low’ status actors is reflected
by their power and influence. ‘High status’ individuals are influential in political and economic circles
(see BAE bribery scandal and government protection) and the complexity of their organisations enable
them to insert intermediaries to protect them from investigation and prosecution. The ‘Low status’ actors
(Croall 1989) have less power, operate in less complex organisational structures, are more transparent and
open to investigation.

Entrepreneurs and a Lexicon of Justification

When trying to rationalise the theories of white collar crime with entrepreneurial activity, through
concepts of morality, economic and social capital, we find an ambiguity in the phraseology used whwen
trying to justify activities that in other circumstances would criminal. Ross’s use of the word
‘criminaloid’ is a hybrid phrase that means neither immoral nor illegal and describes the entrepreneurial
as a ‘criminal like’ man. Sutherland (1940; 5) on the other hand, whilst emphatic in his condemnation of
‘white collar’ entrepreneurs, inasmuch that they belong to the ‘respectable class,’ acknowledges that such
activity ‘is not ordinarily called crime.’ Other commentators describe deviant behaviour in less
accusatorial phrases such as ‘wrongdoing, violations or breaches’ (Croall 2011; 15); ‘positive or negative
activities’ and ‘shadow activities’ (Sauka 2008; 2); ‘illegal entrepreneurship experience (IEE)’ (Aidis and
Praag 2006); and Ruggiero (2000; 69) adds further confusion through his discussion of ‘ ‘clean,’ ‘dirty,’
‘legal,’ ‘semi-legal,’ ‘illegal,’ or even ‘mafia’ ‘ entrepreneurial activities.’

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The descriptive lexiconography is reluctant to condemn this twilight world for a variety of reasons, the
activities;

 May add to social capital, particularly in times of hardship, as entrepreneurs seek alternative
methods to increase profit;
 Are practises that are approved within that industry/culture, as they achieve a profitable outcome;
 Are committed out of sight of victims and therefore attract no adverse comment;
 Are deemed by communities as irrelevant to their lives;
 Ignore the rules, guidelines or legislation as they are considered unfit for purpose, and adopt a
‘deviance’ route with an expectation that the rules will eventually change.

As Drucker (2002, 25) explains, entrepreneurs ‘search for change, respond to it, and exploit it as an
opportunity’ because change is healthy and normal, and entrepreneurial activity is the ‘cornerstone of our
economy’ (Winrow 2010; 39). For the economist, entrepreneurs are an essential ingredient in social and
economic development and whilst Baumol (1990, 1993) and Sutherland’s (1940, 1943) theories rightly
draw our attention to corporate deviance, the common person will rarely see themselves a victim. If they
do it will be as part of a shared experience (banking collapse) and beyond their ability, as an individual, to
react and fight back. However when the same rules are applied to street level entrepreneurs, we note some
differences.

Making sense of the quagmire.

In order to proceed further it is necessary to consider the boundaries within which SME entrepreneurs
may operate and develop a framework that captures the amorphous concept of white collar crime as
described above, which is an (over)simplification of the debates that have raged during the last century.
We must accept all business enterprise is governed by rules and regulations that can be monitored and
enforced to ensure professional standards are maintained. This can take the form of self regulation
monitored through agencies such as the Trading Standards Office, Office of Fair Trading, Health and
Safety Executive; or professional bodies such as Nursing and Midwife Council, Institute of Chartered
Accountants in England and Wales; and of course the criminal law. Additionally there may be specific
contractual obligations that can be enforced through a civil court and other contractual requirements set
out by Acts of Parliament such as Sale of Goods Act 1979. It is interesting to note that since the collapse
of the financial markets in 2008, the Financial Conduct Authority (2013)(FCA) has introduced ‘principle
based regulations’ to ensure greater accountability, necessitating financial practise to move ‘away from
reliance on detailed, prescriptive rules and relying more on high-level, broadly stated rules or Principles
to set the standards by which regulated firms must conduct business’ (Black, Hopper, Band and Smith
2007; 191). A statement that acknowledges ‘detailed, prescriptive rules’ have not been applied robustly
enough and assume ‘subjective’ principles will return society to a ‘moral’ business model of practice.

In determining street level criminality, we will adopt the moral and sociological approach of Ross and
Sutherland and argue that any act that contravenes a civil, professional or criminal code will be deemed
‘criminal.’ Partially because we are persuaded by Sutherland’s argument that offenders do not have to be
convicted in a criminal court to be a criminal, but also to acknowledge there is always a victim, even if
they aren’t aware of their status. In order to differentiate the ‘common’ criminal from the ‘collared’
criminal, we will develop a profile of characteristics adapted from a typology developed by Croall (2011;
336). This is necessary because the characteristics of the street entrepreneur differ from their corporate
counterparts.

 Offences may be invisible as they are developed in a legitimate working environment.

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  SME’s are less complex than the larger corporations and are easier to investigate.
 There is less ‘diffusion of responsibility’ within an SME as there are fewer intermediaries and the
chain of command and supervision is easier to follow.
 There is a closer relationship between the victim and offender, often based on trust developed
through personal contact.
 Detection is easier as victims often recognise deviant behavior and bring it to the attention of a
local agency for action.
 Local agencies are able to deal with local complaints (national and global enterprise can suffer
from poor judicial cross border cooperation)

Social conditioning and the gullible victim

Whilst corporations develop their entrepreneurial activities through a global market, the street level
practitioners are confined to local venues and the City provides the greatest opportunities of all. The City,
described by Ruggiero (2000; 5) as an ‘urban bazaar’ of opportunity, is ‘a mixture of official and illegal
activities, and a constant flow of commodities, whose nature may be legal or otherwise.’ It is a perfect
market place for street entrepreneurs to practise their skills. It is sufficiently diverse for a multitude of
activities to take place, a large client base to ensure good profit margins, yet small enough to become
influential within a community that is not necessarily based on social status, but on specialised skills,
personal contact and trust. The direct relationship between the street entrepreneur and client is a key
factor in how SME’s are conducted, regulated and exposed. The client relationship is personalised with a
clear expectation of service and when this breaks down there client will recognise themselves as a
‘victim’ and seek redress through an appropriate agency.

As opportunities for entrepreneurs increased so did the client base. The class structures of the early 20th
century dictated the levels of economic, social and cultural capital that could be attained and defined the
levels and type of successful entrepreneurial interaction. The Victorian class descriptors of Upper (the
aristocracy; hereditary land owners), Upper Middle (the new industrial entrepreneurs; bankers; large scale
shop keepers), Lower Middle (clerks; small shop keepers; employment where literacy was a necessity)
and Working Class (unskilled, semi-skilled and skilled) established a direct relationship between
educational capital and ability to accumulate wealth. The street level entrepreneurs were operating almost
exclusively within a criminal underworld, providing illicit goods and services to the poorer classes, who
were struggling to survive (for examples of illicit entrepreneurialism see Foreman 2008; Morton 2002).
This relationship was based on trust, the entrepreneur assumed a degree of protection from the client and
the client assumed the goods were good value because they were illegal, not faulty.

By the 21st century this concept had given way to a new schema (Goldthorpe, Llewelwyn and Payne
1980) of social status aligned to Bordieu’s (1984) theory that individuals exist in a multidimensional
space in society and are defined by a combination of economic capital (wealth and income), cultural
capital (the ability to appreciate and engage with cultural goods and educational success) and social
capital (contacts and connections which allow people to draw on their social networks).

In a survey (of 161,400 participants) undertaken by the BBC, Savage et al (2013; 223) used Bordieu’s
theory to develop a ‘multi-dimensional construct’ in which class is not merely an ’economic phenomena
but…….profoundly concerned with forms of social reproduction and cultural distinction.’ Six out of the 7
identified groups, and in particular the ‘new affluent workers’ and the ‘emergent service workers,’
demonstrated high levels of economic, social and cultural capital and a desire to increase their social and

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cultural status. These emerging groups are most open to street entrepreneurs who offer a range of services
and commodities to sate their needs. Some of the successful 20th century entrepreneurs to recognise the
new wealth of the lower classes were Billy Butlin – package holidays for the working classes; John
Bloom – ‘Rolls Razor’ and the production of cheaper white goods; Freddie Laker - cut price air fares for
the masses etc. These opportunities were embraced by the masses who wanted more chances to
demonstrate and enjoy their wealth and social status.

Productivity and Street Entrepreneurs

Let us consider Baumol’s concept of ‘productive,’ ‘unproductive’ and ‘destructive’ capital as applied to
street entrepreneurs (Sobel 2006; 1). In times of strong financial growth ‘productive’ entrepreneurship
will contribute ‘directly or indirectly to net output of the economy or to the capacity to produce additional
output’ (Baumol 1993; 30) and will add to the ‘economic performance of a country’ (Davidsson and
Henrekson 2001; 1). Whilst the strong growth of large organisations is considered a productive outcome
for the state, it is argued that such activity could be considered destructive for street level entrepreneurs.
The creation of shopping malls and ‘out of town’ retail parks will often force the closure of High Street
shops and local markets, which cannot compete with the economies of scale of the corporate giants. For
the street entrepreneur to survive they have to adapt their business practises, sometimes by illegal means
in order to survive and unlike their corporate peers do not possess the level of influence needed to defend
their actions if required (the interjection of Prime Minister Tony Blair and the BAE bribery allegations).

It could be argued the illicit activities of street entrepreneurs add to the ‘net output’ of the local
community. The corner shop that ‘survives’ by splitting ‘multi-packs’ and selling the contents as
individual items; failing to pay staff the minimum wage (they are often family run businesses); buying
and selling goods supplied by illegal sources; avoiding VAT; may be committing offences but their
activities add to the community capital, not in financial terms but social cohesion. SME’s of this nature
are often the cornerstone of a community, supplying goods to citizens who cannot travel to the shopping
malls, hypermarkets and retail parks. Their ‘productive’ value is developed through a trust between the
actors and customers, who believe they are receiving services denied by the state and corporate
enterprise.

‘Unproductive’ entrepreneurism is described as ‘rent seeking, illegal activities and shadow activities’ (Sauka
2008; 4) that make no real contribution to economic output. Entrepreneurs may use both the legal system and
illegal activities, to hide or transfer capital from one institution to another via ‘litigation, takeovers, tax
evasion and avoidance efforts’ (Sauka 2008; 4). Street entrepreneurs rarely have the resources to protect
themselves through litigation as a ‘rent seeking’ activity, they can, however, engage in illegally transferring
money as money launderers. The expanding property market provided opportunities for ‘white collar’ elites to
engage in money laundering activities. In recent year’s local accountants, lawyers, bankers and estate agents
have been prosecuted for disposing of criminal funds through the sale of domestic and commercial properties
(Office of Fair Trading 2014). The expansion of cultural capital and desire to travel to exotic lands created a
need for money exchange outlets and in 2013 a Bureaux de Change entrepreneur operating in West London
was convicted of laundering £170m of organised crime cash. He had previously been convicted of a similar
offence in 1999, but the conviction had been quashed on appeal. These activities are conducted in the ‘twilight
zone’ behind a facade or morality, but are clearly criminal in the full sense of the word.

Other ‘unproductive’ activities involve tax evasion and it is estimated the public purse is annually deprived of
46% or £14bn in unpaid taxes (HMRC 2012), of which about 7% is from the SME sector. During 2013
HMRC targeted SME’s and increased the number of prosecutions by 31%, amid accusations they were
targeted because they have smaller budgets, are less likely to use accountants, more prone to making mistakes

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when completing forms and are easy targets because they are in a weaker position to negotiate. This also
includes the corner shop entrepreneur whose activities area socially productive. We would also have to
include the ‘blue collar’ artisans who are offered ‘discount for cash’ by clients complicit in these avoidance
practices.

The concept of ‘destructive’ entrepreneurship is perhaps the most relevant to street entrepreneurs and
‘collared’ criminals as it deals with an ‘informal economy’ of profitable acts that, whilst adding nothing
to the state capital, are capable of destroying legitimate street level SME’s operating in the same business
sector. Let us consider the seller of counterfeit goods (clothing, bags, accessories) who undoubtedly add
to the woes of the legitimate High Street outlets, as will those who use illegal labour, pay below minimum
standard wages, or ignoring health and safety regulations to reduce costs. As before the legitimate actors
do not have the economic or political power to challenge or survive such attacks and may themselves be
forced to engage in similar illegal activities to survive. This is a conundrum as illicit street entrepreneurs
who believe they are challenging corporate enterprise are also damaging the SME’s they themselves
purport to be and as Sauka (2008; 5) notes in ‘cases where these [illegal] activities attract followers’ the
overall outcome will ultimately destroy society.

Sauka and Welter (2007, 6) argue the need to differentiate between ‘activities and outputs in order to
assess productive, unproductive and destructive entrepreneurship.’ They suggest it is possible to have
legitimate or ‘productive’ activity that does not contribute to society; ‘unproductive’ activity that
contributes to society (Davidsson 2004); and for some parts of society ‘destructive’ activity could even be
welcome. In their research into illegal entrepreneurship experience, which they term ‘unconventional
human capital,’ Aidis and van Praag (2006; 284) conclude that some entrepreneurs benefit from their
illegal experiences and produce business performances beyond their older contemporaries.

If we accept ‘outcomes’ as a more relevant measure of street entrepreneurism we have to accept the
clients recognise the illicit nature the activities and welcome them as a service that otherwise could not be
attained elsewhere. The purchase of counterfeit goods becomes an extension of the ‘marche ouvert’ sales
pitch ‘it fell of the back of a lorry,’ an unacknowledged code that the goods are not strictly legitimate, but
a good bargain. The participants at this level of entrepreneurial deviance engage in a contract of
subconscious approval that is not hidden behind a facade of apparent legitimacy. The danger here is of
accepting illegal activity because it has a contextually positive output that would not be out of place if
conducted in a secretive corporate setting.

New Markets and the ‘collared criminals’

The activities of the street entrepreneur described above differ in their relationship from the new
entrepreneurs that emerged during the 1980’s. The deviant entrepreneurs of this era hide behind a facade
of legitimacy, whilst engaged in criminal acts for the sole purpose of personal profit. They abuse their
positions of trust with clients who are known to them, unlike their corporate counterparts who prefer their
victims to faceless and kept at a distance.

The arrival of Margaret Thatcher in 1979 heralded a new social order that promoted individualism,
privatisation and deregulation that enabled entrepreneurs to develop and grow in a free market society.
The apparent decentralisation of central government and robust challenge of the power and control
wielded by the Trade Union Movement ‘turned the working class from a repository of nostalgia and
cultural romance into an aspirant bourgeoise’ (Jenkins 2007;164). Ironically mass unemployment and
redundancy payments enabled many of the unemployed to re-train, develop their own businesses and join
the ranks of the entrepreneur.

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It was under Thatcher’s government that entrepreneurialism flourished, her philosophy of a free market
economy was considered ‘the best creator of wealth’ (Kim 2010; 210; Joseph 1981). At the beginning of
her premiership Britain was ranked 15 th out of 22 countries by the Organisation for Economic Co-
operation and Development (OECD) for ‘economic freedom’ and ‘entrepreneurial welcome’ (Jenkins
2007; 165), by 1999 Britain was ranked in 1st place. The entrepreneurial culture continues in the current
economic crisis and once again it is the unemployed who lead the way ‘the UK’s entrepreneurial activity
…. has [seen] a 3.4% rise in the number of active companies in the first six months of this year.’
(Barclays and BGF 2014)

Perhaps one of the most important planks of Thatcher’s programme for change was the sale of local
authority housing stock to sitting tenants ‘and for tenants with significant tenure, at deep discounts’
(Worcester 1989; 72). During her period of office Thatcher saw a 16% rise in home ownership within the
Social Class DE group with the sale of over 1 million council houses (Ungerson 1993; 75). Suddenly
large numbers of working class families were enjoying private home ownership and at the same time
became exposed to a variety of professional services they had previously not encountered. For some this
was a daunting task as they opened bank accounts for the first time (many working class families relied
on the Post Office Giro Bank), sought the advice of mortgage brokers, building surveyors and other
professional services.

White Collar crimes

The sale of public housing stock created a huge environment for ‘white collar’ elites. Banks and building
societies that operated as pillars of social propriety began to compete with each other for a bigger slice of the
mortgage pie. They introduced a complex array of lending schemes with hidden clauses in the ‘small print’,
incomprehensible to ordinary citizens, not illegal but morally and ethically unsound. The so called Financial
Advisors employed by financial institutions and self employed Independent Financial Advisors (IFA)
developed cartels that produced bonuses for the seller, but were often not in the best interest of the buyer. It
was not uncommon for house buyers to be directed by an Estate Agent toward a preferred solicitor and/or
IFA, on the pretext that they know each other and can expedite matters quickly, when in fact the sole aim was
to increase bonuses that could be shared. As home owners became used to their economic value, they became
complicit in ‘white collar’ activities, often providing fraudulent documents to inflate their income in order to
raise larger mortgages.

The Payment Protection Insurance (PPI) scandal is an example of how ordinary citizens are duped into
products by trusted ‘professional’ entrepreneurs as they mis-sold millions of policies to unsuspecting
customers. Clients were unaware they had entered such a scheme or later were denied a legitimate claim due
to an ‘exclusion’ clause in the small print of the policy ’ (Finacial Ombudsman Service 2014). This example of
illicit activity and hidden entrepreneurism is estimated to have cost the banking industry ex excess of £20bn.
In its turn the scandal generated a plethora of legal services offering to reclaim funds on behalf of clients, at
extortionate fees where ‘PPI claim handlers often keep as much as 30% of a refund,’ which is unnecessary as
it’s ‘a free, straightforward process that you can do yourself’ (FSA 2014). The same claim firms are now
suggesting a mortgage mis-selling scandal committed by independent mortgage brokers (Uren 2013).

Housing buying and selling also involve the use of Estate Agents and Solicitors whose activities can operate
in the twilight area. Some scams involve Estate Agents under valuing a property for a third party who then sell
the property later at an inflated price. Alternatively overvaluation can involve fraud as Stelios (2014) explains

‘The scam involves property professionals such as mortgage brokers, surveyors, and solicitors working
together to obtain mortgages on properties that are overvalued. For example, if the fraudsters negotiate to buy
a property for £200,000 the surveyor will value the property at £250,000 and they broker will arrange for a

9
mortgage to be secured against the property to that value. The solicitor will perform the conveyancing on the
property and when the mortgage funds are obtained from the lender the vendor will be paid £200,000 and the
fraudsters will keep the additional £50,000.’

As with other professional services Estate Agents are regulated and the Office of Fair Trading’s web page
provides a comprehensive list of enforcement actions made against specific agencies
(http://www.oft.gov.uk/OFTwork/estate-agents/ea-enforcement/#.U1ouxKL65a0). A similar website
identifies actions made against solicitors who have engaged in illicit activities
(http://www.legalombudsman.org.uk/ombudsman-decision-data/ombudsman-decision-data.aspx).

There are other areas of professional malpractice that involve ordinary citizens who trust their expertise. The
NHS is seen as an icon of virtue and its practitioners as morally and ethically above suspicion. It was a
complete betrayal of that trust when in 2014 Dr Joyce Trail, a practicing NHS dentist, was convicted of
fraudulently claiming £1.4m in fees, having submitted over 7,000 bogus claims. This was not an isolated
incident and an NHS report (2013) estimated losses to fraud of £73m. Whilst some of the fraud is ‘victimless’
i.e. making claims for nonexistent clients, other claims are made on behalf of ‘real’ clients who were over
charged through a process of ‘split charging’ where a single course of treatment (@£198) is split into 3
individual claims (£501) causing an inflation of over 200%. These are fees ‘real’ clients are paying for
services they believe are subsidies through the NHS.

As social and cultural capital increase so do the opportunities to engage in products that demonstrate an
individual’s freedom of choice and demonstrate wealth and cultural status. Unregulated medical and quasi-
medical practices are being offered by ‘cosmetic cowboys’ in an industry estimated at £3.6b using dermal
fillers, Botox, chemical peel, and laser hair removal, which can be performed by anyone, regardless of
medical training (NHS Choices 2014). Such practices raise moral and ethical issues particularly when the
treatments go wrong. There is an implicit trust between the provider and client that the practitioner is qualified
and trained in the technique being advertised.

Blue Collar Crimes

It did not take long for the new house owners to find ways to improve their property. In the first ten years
of ownership there was a noticeable rise in the installation of central heating (Worcester 1989) and it was
easy to identify the new owners on any traditional council housing estate. The installation of double
glazing, re-painting outside walls or using faux stone cladding was a show of individuality and wealth in
a utilitarian environment. The installation of burglar alarms and converting front gardens into driveways
were other signs of the ‘new affluent workers.’ It also established a link with the ‘blue collar’ artisans
who had recognised the entrepreneurial opportunities in this expanding market place. Some of these
entrepreneurs are not trained tradesmen but unskilled, and often dangerous. These Rogue or Cowboy
Traders have no skills or qualifications, are not members of a trade association, have inadequate
insurance and are unaware of codes of practice or building regulations. Their actions result in 70,000
complaints made every year to Consumer Direct. Fortunately the majority of ‘blue collar’ workers are
highly skilled individuals who provide excellent value for money, comply with their contractual
obligations and rely on their reputation to advertise their services. They recognise they are competing
with ‘undercutting by poor quality or rogue traders’ (TNS-BMRB 2011; 91) and to survive may also have
to lower their standards in order to survive.

An interview with the director of a ‘medium’ sized electrical and plumbing business identified some
serious issues he had faced.

10
‘I don’t think the public are aware of the rules and regulations that cover my industry. For example Gas
Safe requires all gas fires and boilers that have been installed to be registered with the Local
Authority ..... it’s not just landlords its everyone. When you phone up Gas Safe you have to give your
registration number and they pass it on [to the Local Authority]. That way you know a qualified gas fitter
has been used....... How many times do plumbers look at a boiler with a fault and tell you you need a new
boiler. They do that because they aren’t trained in finding faults and fitting a boiler is easy and makes
them more profit’

He then spoke of an apprentice he had dismissed many years ago because of incompetent.

‘I walked onto a site a while ago and there were lots of trades. The project supervisor was pointed out to
me and I recognised him as someone I had let go he was a bit of a ‘div’ ... I knew he had started up a few
businesses and they had all failed ..... I had to let him know we were on site and got talking .... he told me
he had bought his qualifications on the web and they were accepted by everyone. He’s now a bloody
project manager!’

Health and Safety is an area of concern in an industry where ‘148 workers killed at work, 78 000
employees are injured 27 million working days were lost due to work-related illness and workplace injury
(2011/12) and this cost society an estimated £13.8 billion in 2010/11 (HSE 2014). SME’s are invariably
working within small profit margins, which they are trying to increase. Unfortunately they will disregard
health and safety guidelines and place the work force in jeopardy. An interview with a senior HSE
investigator is quite revealing;

‘Ever since Piper Alpha [disaster 1988] the big companies look for advice and I often get them asking me
to come and discuss a problem they have. They will spend millions if necessary to put something right. I
see myself more as a consultant than an investigator….. They don’t want to tarnish their image….. The
small business can’t do that they are just trying to survive and will cut corners at any opportunity. ’

When questioned about the introduction of the Corporate Manslaughter and Corporate Homicide Act
2007, he acknowledged ‘We’ve had 3 prosecutions all relatively small businesses. It’s easier to trace the
chain of command.’

Collarless crimes

The age of Information Technology has created a new environment for the entrepreneur. Whereas the
‘blue’ and ‘white’ collar street level actors have a relationship based on personal contact, the ‘collarless’
actors are remote and hidden. A report by the United Nations Office on Drug and Crime (UNODC 2013;
xvii) estimates that 80% of all cybercrime originates in some form of organized activity it is therefore
difficult to establish the size and full activity of the street entrepreneur in this arena. We do know that a
sub-culture of young men [and women] are engaged computer-related financial fraud and that
perpetrators no longer require complex skills or techniques to carry out these activities. A student
complained they had purchased tickets for a concert via a website using a debit card. Needless to say the
failed to arrive and on reporting to the police discovered the same entrepreneur had conned several others
victims in a similar way. The perpetrator was a single parent who needed additional funds and had used
the web, assuming the victims would not complain.

Collarless street entrepreneurs are able to use unregulated websites to fraudulently sell goods or advertise
services. It is estimated by the City of London Police, who have taken control of Action Fraud, that
cybercime cost the UK economy £52bn in 2013. Some of the scams to emerge in recent years include

11
advertising on global websites the availability of bogus accommodation at major sporting events; selling
holiday accommodation that doesn’t exist; tickets for concerts; as well as selling stolen property.

Conclusion

It is far too simplistic to assume street entrepreneurs only operate in the ways described above. The
permutations of illicit enterprise are endless and open to the imagination of those who see an opportunity
to create a profit. The examples given in this chapter are intended to test theories of entrepreneurial
enterprise and the hidden facets of ‘collared’ criminality through sociological perspectives of moral and
ethical approval. Whilst Baumol’s concepts of ‘productive,’ ‘unproductive,’ and ‘destructive’ actions can
be applied to corporate enterprise they are less convincing when applied to street actors. Street
entrepreneurs are not concerned with the economic capital of the state; their focus is on personal survival
or the survival of an SME. Unfortunately in the process it is possible their actions could be detrimental to
fellow street entrepreneurs who are operating from a similar position.

A more convincing argument is presented by Sauka and Welter who focus on outcomes, which it is
argued, need to be placed in the context of the environment in which they are operating. Small
communities, particularly in deprived areas, rely on street entrepreneurs to provide goods and services at
‘discounted’ prices, which may be as a consequence of supplying illicit goods or paying for services ‘cash
in hand’ to avoid VAT. Whilst the acts are criminally reprehensible there is a moral dilemma. Some
communities only survive through deviant acts such as this, which are seen by some as a legitimate
challenge to the power of corporate enterprise and if hidden in the complexity of such corporations would
be accepted as a cultural norm.

The relationship between actor and client at the street level is a crucial element in determining whether a
client can be classed as a victim. In most cases there is an unwritten acknowledgement that some form of
deviancy has taken place and that both the supplier and client are realising some form of profit as a
consequence of the transaction. Whilst Baumol and Drucker assume rules of entrepreneurial engagement
can be changed in the fullness of time, the street entrepreneur is under no such illusion. They are aware
their activities are illegal and they have no moral intent to deceive the client as to the true nature of the
product, unlike corporate actors who are unconcerned for a client’s well being, preferring to see their
activities as victimless. Street entrepreneurs and their clients assume a ‘bargain’ is a euphemism for illicit,
illegal or immoral products and therefore an acceptable contract.

The illicit activities of the ‘collared’ elites is an all together different matter, they operate with an
intention to deceive. They build a relationship through personal contact and promote their professional
status as an act of regulated trust. Clients seek out these individuals as consequence of their status seeking
advice and guidance. Rule breaking here is not entrepreneurial development; it is an act of criminal intent.
There are no contexts within which an argument of moral latitude can be developed.

12
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