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A GENERAL OVERVIEW ON THE RISE OF ECONOMIC CRIMES BY: MADHU VASANTH N
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A GENERAL OVERVIEW ON THE RISE OF ECONOMIC CRIMES
AUTHORED
BY: MADHU VASANTH N
School of
Law, Christ (Deemed to be University), Bengaluru
ABSTRACT:
One of the major problems endangering the economies of nations is
economic crime. Bribery, money laundering, forging customs or tax reports, and
organised manipulation in the economic system are just a handful of crimes that
are linked to other chains of crime and are each capable of destroying social
and economic capital on the national level. The fundamental traits of economic
crime are:
(1)
deviant behaviour that violates
economic criminal law;
(2)
crime that primarily targets specific
economic sectors rather than individual interests;
(3)
crime that results in physical,
psychological, social, economic, and immaterial harm; and
(4)
Abuse of trust and power.
The following are some
types of economic crime and examples of them:
(1)
neglecting workplace protections;
(2)
unfair business practices;
(3)
economic fraud; and
(4)
Unjustified commercialization of
medical care.
Examples of economic crimes that have the appearance of being
performed include computer crime, insolvency fraud, and consumer credit fraud.
The common elements of all economic crimes include financial windfalls,
upsetting the economic balance, capital loss, interfering with the government
and executives; strategies to regulate the economy’s health and security, etc.
For this reason, governments work to determine the actual causes and
contributing factors of economic crimes in order to maintain economic security
and order by adopting standard legislation. As a result of economic crime,
inflation, poverty, commercial crime, development, and corruption have all been
observed to happen. The key goal will be to establish the causal relationship
between criminal business and each of the specified sectors.[1]
It has never been easy to study economic crime. Writers have provided a
range of definitions of economic offences and ideas that take an economic
approach to crime during the previous few centuries. Interest in economic crime
and the economic approach to offending has fluctuated over this time. Gary
Becker’s foundational work on a neoclassical approach to crime at the end of
the 1960s marked its most recent resurgence, and more than three decades later,
economists, sociologists, and criminologists continue to utilise, modify, and
debate this perspective. Thus, a wider study of economic crime and the study of
the criminology behind economic crime will provide a greater understanding as
to why there is a steep rise in economic crimes and the same will be analysed
in this paper.
KEYWORDS- criminology, unfair business practices, economic crime,
manipulation, fraud
INTRODUCTION:
As far as we are aware, economics is
primarily concerned with money. If I claim that a person can live without
money, it is incorrect. An essential requirement for survival is money.
Numerous crimes have their roots in a person's worse economic circumstances.
Since economic life is important, it determines the social and cultural values,
which are as ancient as human civilization itself. All social patterns are
shaped and controlled by economic forces, as are all other facets of human
existence. The whole nature of the social, political, and spiritual aspects of
life are determined by economic factors, and when the economic underpinnings
alter, the entire superstructure likewise undergoes fast transformation. Those
who focus on the financial elements of crime and examine how the state of the
economy affects criminality. Money became so significant in human existence
that it is currently the only criterion that determines a person's social rank
in contemporary society. Both revolution and criminality are threatened by
poverty. Crimes are performed for a variety of reasons, including gaining
unnecessary items as well as meeting basic needs. Most crimes are perpetrated
as a result of man's propensity for acquisition and his desire to amass excess
money. Man's drive toward materialism breeds wickedness inside him.[2]
As we gather more about how people
understand the costs and advantages of crime and how they use this information
when selecting criminal over noncriminal actions, the discussion over the
economic approach to crime will likely continue. These crimes differ from
conventional crimes in terms of their goal and method of operation. The classic
criminal targets little amounts of cash and frequently resorts to force and
traditional tactics to accomplish his goal. On the other hand, a criminal
conducting an economic crime steals enormous sums of money and uses communications
and technology to conduct illegal business transactions, tamper with databases,
or plan sizable scams. His victims are gullible and gullible, and they
frequently don’t realise they been duped. Another trait of economic,
commercial, corporate, or white-collar crimes is that they are frequently seen
as “good business,” and “cutting corners” is often a necessary part of good
business. Legal infractions by businesses are frequently seen as a normal
component of the corporate system, just as industrial espionage or psychologically
manipulative advertising.
These actions are seen as a
continuation of the capitalist system, which is predicated on profit and a
technical devotion to the text rather than the spirit of the law. People who
engage in these activities claim that they have been taken advantage of. In
many nations, especially those that are developing economically, socially, or
politically, economic crimes have skyrocketed. Monitoring such offences entails
a number of difficulties. The first is definitional: for example, “manufacturing
of dangerous items” or “illegal monopolies, traits or components.” The second step
is determining who is responsible—the corporation or the individuals who
operate it. Thirdly, it can frequently be exceedingly challenging to demonstrate
criminal intent. Finally, and perhaps most crucially, despite growing awareness
of the magnitude of such crimes, the public remains mostly unconcerned and
powerless to place pressure on the government.
KINDS OF ECONOMIC CRIMES:
Economic crimes can be generally
divided into three categories, which are as follows (although this list is not
all-inclusive):
Economic crimes that are more common
today, such as fraud, smuggling, and corruption. .Emerging or contemporary
economic crimes such credit card fraud, cash forgery, UPI fraud, cybercrimes,
etc. economic transgressions that include crimes like money laundering.
BLACKMAIL- Although not strictly an economic
offence, blackmail does have a financial component. Threatening to injure
someone physically in order to get them to give up anything valuable—like cash,
a priceless object, private information, property, etc. is illegal.
BRIBERY- Bribery is a highly widespread type
of economic offence that involves the giving or accepting of money or any other
valuable item in exchange for favours such as job chances, promotions, or other
ways to go around the system. Government representatives, lawmakers, and
members of the executive branch of states and the country sometimes offer or
receive bribes. Both offering and taking a bribe are against the law.
CREDIT CARD FRAUD - Credit
card fraud is the unlawful use of a person's credit card to make a purchase or
to steal money.
FORGERY- Forgery is the act of
misrepresenting a false negotiable instrument as a real one in order to deceive
or scam the receiver.
INSIDER TRADING- Insider trading is when a person or
employee who works for a firm or organisation utilises secret, sensitive
information about the company to trade in stock in publicly traded companies.
INSURANCE FRAUD- Insurance fraud occurs when the
insurer defrauds the insured of money, regardless of the type of insurance.
MONEY LAUNDERING- Money laundering is the process of
investing or transferring funds obtained through racketeering, the sale of
illegal drugs, or other forms of embezzlement to give the impression that the
funds' original source is genuine or impossible to identify.
EMBEZZLEMENT- A person who has been entrusted with
the care of money or property steals it for their personal gain is said to be
embezzling.
RACKETEREERING- A wide phrase used to describe any
illicit commercial activity carried out for personal advantage is
"racketeering."
TAX EVASION- Tax evasion is distinct from tax
avoidance, which is lawful (tax avoidance is the process of identifying legal
nuances to excuse oneself from paying unnecessary taxes). Tax evasion is the
unlawful concealment of income, which enables people to file reduced tax
returns and save money.
In addition to these generic phrases,
the Indian Penal Code, 1860, lists several economic offences; nevertheless,
there are far too many to list here.
RELTIONSHIP BETWEEN ECONOMIC STRUCTURE AND CRIME:
The link between the economy and
crime is inverse, meaning that while economic conditions are good, crime rates
are generally low but rise during times of economic crisis. Because crime is a
natural by-product of economic activity, it fluctuates with the state of the
economy. The crime rate rises during times of economic prosperity while falling
during times of economic hardship. Numerous factors contribute to the rise of
materialism. We may observe it in various eras of human history as we move
toward a superior civilisation. Before the notion of states emerged in
antiquity. People live in a state of nature before a state is created, where
everyone owns everything and nobody owns anything. But the true issue emerged
when people began to think in terms of mine and thin.
The introduction of the idea of
property when the idea of property was introduced, individuals became afraid to
protect their interests. When the idea of the state first emerged, individuals
began to want a centralised government known as the state for their own safety
and interests. The beginning of the industrial revolution in Europe had an
influence on the entire world, and this is why India had a large amount of
industrialisation during the British rule. For India's underprivileged,
industries provide a lot of work opportunities. With the increase in
employment, the hand loom industries saw fierce competition; as a result, the
employees were forced out of the market due to the increased demand for
machine-made goods. With urbanisation, individuals lost touch with the joint
family structure, from which the nuclear family notion emerged. People also
lost authority over their parents and began engaging in unlawful behaviour.[3]
REASONS FOR ECONOMIC CRIMES:
More People today desire a more
comfortable living and more luxury as a result of urbanisation, which brings
about an increase in materialistic lifestyle amenities. The issue of having and
not having emerges from having things and not having them. In our society,
comparison becomes the norm. A materialistic culture emerges, where objects
have value but not people. People now crave money and goods, and relationships
have no intrinsic worth. Due to this disparity, people commit more crimes in an
effort to get more and more. The primary driver of economic crime is greed, not
necessity; this is true even for those who have access to increasing sums of
money in order to satisfy their insatiable appetites for material goods. People
multiply by having more children, and conflicts emerge because there are fewer
resources available, leading to an increase in demand and a decrease in the
amount of resources available. Being impoverished teaches everyone, even
families, that stealing is not evil but rather a need. Poverty is the mother of
economic crime. Children who grow up in dysfunctional households, including
those headed by a single parent, suffer because they lack positive role models
with whom to socialise. Old traditional values are erased by modernity;
individuals with low moral standards commit more crimes without fear or lack of
spiritual ethics, which causes them to live a life devoid of values. Because to
inflation and the skyrocketing cost of essential food supplies, individuals are
forced to steal food or go hungry. Explanation: Increased workplace
exploitation drives people to commit crimes out of frustration.
It was necessary to replace the
capitalist state, which was fostering a criminogenic society, with a socialist
one, in which people's socioeconomic rights would be safer and more secure,
undoubtedly resulting in a decline in crime. In a capitalist society, the
criminal code serves as a tool for the state and ruling class to uphold the
capitalist social and economic system and to safeguard their interests. Because
of the legal system's pressure, the underprivileged segments of society
continue to be repressed, and their unhappiness leads to crime. The issue of
crime can only be resolved by the collapse of capitalist society. Apart from
that, quite a few crimes go unnoticed and unreported owing to the victim's lack
of initiative in pursuing criminal charges against the attacker or the crime's
manipulative techniques. As a result, the current state of affairs has produced
a paradoxical situation in which crimes are prevalent regardless of whether the
economic situation is good or unfavourable. The view that economic conditions
are only one of many environmental factors that contribute to the
multiple-factor theory of crime causation. Criminality cannot be directly
linked to any one of the four impact spheres—economic, biological,
psychological, and social—but each one is a component of the whole. Economic
factors do have an impact on some sorts of crimes, such as pathological crimes,
sex crimes, and political crimes, but overall societal criminality cannot be
primarily attributable to economic factors. Economic values undoubtedly play a
significant influence in society, but their importance is just relative since
it depends on other sociocultural elements. The link between crime and the
economy would likewise be significantly impacted by legal controls on economic
activity.[4]
CHANGING DIMENSIONS OF ECONOMIC CRIMES:
These crimes are distinct from crimes
against people in that they have no immediate impact on the victim's physical
condition. For example, fraud is a type of economic crime that differs from
assault because fraud involves taking money from a person's bank account
without their permission, whereas assault involves inducing real fear of
impending physical harm in the victim's mind and/or actually inflicting harm on
the victim. These offences are also referred to as white-collar or blue-collar
crimes. They vary from crimes against people in that they don't involve
physical force, take place after deliberate consideration, and are frequently
perpetrated by groups of people, especially those who have power over others,
such as business directors, general managers, politicians, bureaucrats, etc.
Economic offences serve as a metaphor
for a failing government and serve as proof of a crooked executive branch,
market, and institutions.
The economic crimes and other crimes
or crimes against the person can be attributed to a few modern and specific
traits. Which are:
·
An
economic crime is committed with the goal to make a substantial profit, avoid a
material loss, or to harm the victim financially. Pecuniary (monetary) profit
or loss is also included in this definition of material profit and loss.
·
These
crimes include components of criminal deceit, fraud, or cheating.
·
Although
economic crimes cannot damage a person physically, they can have a negative
influence on his or her financial well-being. Businesses or other financial
organisations may also be the target.
·
Such
acts have a detrimental impact on a nation's financial situation.
·
People
with power in the political or economic areas of society, who have access to
protected, sensitive information as well as the means to perpetrate these
offences, make up the privileged or wealthy segments of the population who
commit these crimes.
CYBER ECONOMIC CRIMES:
It should be remembered that
financial crime and economic crime, as well as cybercrime and financial crime,
are all interchangeable terms. To prevent misunderstanding, do this.
All cyber economic offences are not
wholly new crimes; rather, they are well-known crimes that have been committed
with the assistance of new technology that has been developed through time and
is then exploited for these offences. Some crimes, however, are completely new.
Hacking into a computer system or
network, stealing sensitive personal data (typically financial information),
fraud, and cheating are all common cybercrimes. These are only a handful of the
numerous attacks that take place thanks to technology and the internet. A
thorough grasp of banking organisations, their systems, fail-safes, security measures,
etc. is necessary for certain large-scale, complex assaults.
The World Economic Forum, for
instance, stated in 2018 that fraud and economic crime formed a trillion-dollar
business and that in 2017, private corporations spent $8.2 billion on anti-money
laundering systems and tactics in total.
Due to the proliferation of payment,
sale, and currency exchange options, cybercrimes such unlawful trafficking and
money laundering are on the rise. More attack vectors are created by new
techniques. Financial or economic crimes are now widespread due to the
unrelenting rise in digitization and automation of financial organisations and
their systems.
Another characteristic of recent
origin is the blurring of the line that traditionally separates fraud from financial
crimes. For instance, money laundering, bribery, tax evasion, and other similar
crimes have historically made up financial crime. Contrarily, the term
"fraud" refers to crimes like forgery, insider trading, deceit,
theft, credit schemes, etc. But when cybercrimes of an economic character cross
over into the realms of both financial crime and fraud, these divisions are
becoming less clear and more intertwined.[5]
CONCLUSION:
The last 20 years or so have seen a
change in the nature of economic offences. Access to financial institutions and
to sensitive personal financial information has risen with the development and
growth of the internet. Due to this, new hazards have emerged in regular
commercial transactions that not everyone is aware of. Transactions have become
look insignificant because of how simple they are to use, yet possibly victims
of economic crimes suffer because of their familiarity. It's important to not
take for granted the convenience and technology we enjoy. Other arguments are
also relevant, such as the fact that our politicians and current laws are
unable to keep up with the rapid changes in technology and financial exchange
methods, which leads to an increase in these crimes. Sometimes the offenders
get away with it. Another aspect is influential people, who have a voice in how
trade and commerce go and who have the power to manipulate the market to their
own benefit. Due of their influence, it is hard to catch such people, but
eventually, arrests will need to be made since this cannot be allowed to
continue. The bottom line is still to be alert and careful; knowledge is
essential to safety, both for an individual and for society and the country as
a whole. People must take personal action to prevent these types of crimes, and
the government must enact widely accepted laws at all levels. More facilities,
job possibilities, and safe working conditions all contribute to reducing this
issue.
BIBILOGRAPHY:
·
Gál,
I.L., 2019. Economic policy, criminal policy and economic crimes. JE-Eur. Crim.
L., p.100.
·
Arlacchi,
P., 2022. An Analysis of the Reasons for the Rise of Financial Crimes and the
Decline of Violent Crimes. In Cybercrimes and Financial Crimes in the Global
Era (pp. 3-10). Springer, Singapore
·
Menon,
S. and Siew, T.G., 2012. Key challenges in tackling economic and cyber crimes:
Creating a multilateral platform for international co?operation. Journal of
Money Laundering Control.
·
Snider,
L., 2008. Corporate economic crimes. Corporate and white-collar crime, pp.39-60.
·
Cohen,
M.A., 2000. The Economics of Crime and Punishment: Implications for Sentencing
of Economic Crimes and New Technology Offenses. Geo. Mason L. Rev., 9, p.503.
[1] Gál, I.L., 2019. Economic policy, criminal
policy and economic crimes. JE-Eur. Crim. L., p.100.
[2] Arlacchi,
P., 2022. An Analysis of the Reasons for the Rise of Financial Crimes and the
Decline of Violent Crimes. In Cybercrimes
and Financial Crimes in the Global Era (pp. 3-10). Springer,
Singapore.
[3] Menon, S. and Siew, T.G., 2012. Key
challenges in tackling economic and cyber crimes: Creating a multilateral
platform for international co?operation. Journal of Money Laundering Control.
[4] Snider, L., 2008. Corporate economic
crimes. Corporate and white-collar crime, pp.39-60.
[5] Cohen, M.A., 2000. The Economics of Crime
and Punishment: Implications for Sentencing of Economic Crimes and New
Technology Offenses. Geo. Mason L. Rev., 9, p.503.
Article Information
A GENERAL OVERVIEW ON THE RISE OF ECONOMIC CRIMES BY: MADHU VASANTH N
Authors: MADHU VASANTH N
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/04/26
- Volume 2
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
- Access Open Access
- License CC 4.0
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