*the Administrative Justice system

for criminal corporations.

*The Private Justice System

for customers and employees of companies.

*the Peer Review System

for professionals.

Please do remember that, in addition to these systems of formal control for street crime, there are less formal control systems some of which are underground systems such as the KKK and the White Citizens Council. Some are systems of popular justice such as the citizen patrols of the Black Muslims and the Guardian Angels. There are no comparable systems of popular justice for the crimes of the rich in the USA since the demise of the Weathermen and the Symbionese Liberation Army in the 60s.

The upper class is beyond the law in several respects. Its members have a combination of social power, economic power as well as the physical power of the security guards they hire. These forms of power are used to minimize the probability that the rich go to prison.

THE RICH GET RICHER AND THE POOR GET PRISON

            ...Jeffrey Reiman, American Criminologist

--Given this combination of power, the ultra-rich, that 1/2 of one percent of the American population which owns 40% of the means of production in the USA do not commit street crime. 10 % of the population own 90% of the wealth...and class inequality continues to widen--at home and between rich and poor countries.  Even the World Bank, a leading capital financial weapon, calls for programs to decrease class inequality.

AVOIDING AND EVADING THE LAW.  There are several ways in which the rich avoid the law in the first place and evade it if caught in the second place.

Avoiding the Law.

The easiest way to avoid legal consequences for theft, murder, conspiracy to fix prices, exploitation of workers and default on guarantees by the rich is to control the law-making system.  That is why, in the first Lecture, we needed a concept of crime that goes beyond law and order to peace and justice.

One can control the law making apparatus in a country by controlling the politicians who make the law. Control tactics vary from campaign donations to bribery to terrorizing pushy judges and law enforcement officers.

But a favorite way to avoid crime is to benefit from crime without legal responsibility through the device of the chartered corporation. The corporation is an acting entity in the eyes of capitalist law. It is the agent of crime, not the individual stock owner.  It is the corporation which commits the crime from which the rich benefit; not the rich themselves.

The corporation works to limit the liability of the owners through the legal fiction of its existence as a real person. The stock based corporation was invented and proliferates in order to protect the owners of the means of production from direct punishment for the crimes committed on their behalf by the corporation.

Given the economic power to preselect political candidates, the upper class participates in political crime through the agency of the capitalist state.

If physical force is to be used to break a strike, the owner can call the Governor of a state to call out the state militia or the National Guard. The Ludlow massacre of workers, women and children in Colorado is a case in point. The Rockefellers who owned the steel works and mines in Colorado called the governor who sent in the State Militia. 21 people were killed.

If physical force is to be used to dispose of a populist leader in the 3rd world, the CEO of a corporation can use his/her connections to the White House to activate the C.I.A. or the US military as in the case of Guatemala, Nicaragua, Chile and many other 3rd world countries.

Given economic power, the capitalist class can hire private security forces to use whatever physical power is necessary to protect their family and property from pretheoretical crime.  Private security has the added advantage of avoiding intrusion by public police forces into the affairs of the company.

The capitalist class have used private security forces often to break strikes. In the coalmines of Kentucky and West Virginia, owners in Pittsburgh hired the Pinkertons to beat, kidnap and murder strike leaders in the 1920's. At the Ford plant in River Rouge, private police killed striking workers in the 1930's. In the 1950's at the Kohler plant in Wisconsin, private security forces used physical force to break the strike. This is the lost history of corporate crime.

Given ownership of the mass media, the capitalist class can use newspapers, radio news, T.V. news and magazine reportage to shape the beliefs and actions of millions of citizens. Both moral power and social power grow out of this ideological hegemony.

Given economic power, individual members of the capitalist class who do commit crimes against persons: their wives, competitors, or girlfriends, can hire the best lawyers to defend them. They can hire the most prestigious psychiatrists to certify them to be innocent by reason of insanity. They can use influence on judges to grant them leniency via 'old boy' networks from school, private clubs, inter-marriage or church. They can use influence on governors and presidents to grant them pardon for their personal crimes. They can appeal for years through the court system.

An examination of the population of the Criminal Justice System, then, would lead you to conclude that the upper class in America simply do not commit crimes. The Rich never go to Attica, Joliet, Jackson, Leavenworth, Sing Sing or San Quentin. The poor are greatly over-represented in these prisons as well as official statistics on crime.

The truth is larger than the data however. The capitalist class commits more theft and engineers more death than do the thugs on the street by a factor of 20. They are insulated from social control by the factors above.

Selected Cases The tactics above work together to protect white collar criminals from the consequences of their crimes. One cannot have inequality in a democratic society unless there is some way to protect the rich in the crime they commit to get rich.

--Jack Clark was President of Four Seasons Nursing Centers, He stole $200 million from stockholders. He got one year in prison.

--John Peter Galanis was a money fund manager. He stole $10 million from investors. Six months prison; five years probation.

--David Ratliff spent 21 years as a State Senator in Texas embezzling state funds. He got 10 years...probation.

--Seymour Thaler, member of the New York State Supreme Court, was convicted of receiving and transporting $800,000 in stolen U.S. Treasury Bills. One year in prison and $10,000 fine.

--V. H. Madis, a wealthy drug manufacturer diluted an antidote for poison used to save children. One year probation and $10,000 fine.

--Irving Poljansky, First National Bank of Lincolnwood, Illinois artificially inflated the value of bank stock and dumped his shares for 4 million profit. One year in prison; two years probation.

If you are at the upper reaches of the working class or the beneficiary of corporate crime, you will find yourself policed far more gently, loosely, and constructively than if you are at the bottom rungs of the social ladder.

If you were a corporation, you would fare better still. Corporations are policed, punished and monitored by the administrative justice system. It is in the process of being dismantled as the current fiscal crisis worsens.

BEYOND JUSTICE: Corporate Crime There are three studies of corporate crime which report that corporations are far more likely to be criminals than are real persons. They are far more likely to be recidivists as well.

*The 1949 Sutherland Report estimates that 59% of the corporations he studied were criminals.

*A 1979 study of Fortune Magazine found that 11% of the 1043 corporations studied committed one or more major crimes.

*The famous 1980 study of Clinard, Yeager and others found that more than 60% of the 300 corporations they studies committed at least one crime and averaged 4.2 crimes.

Corporate crime is a way of life of capitalism. For many of the reasons cited in the Lecture on Corporate Crime, the officers who don't commit crime on behalf of the corporation they are hired to run either fail or are fired.

Again, in competitive capitalism, the costs of doing business must be transferred to workers, to customers, to the state or to economic systems in other countries. There is no way for any economic unit to operate at a profit. The idea of profits is rendered false by the second law of thermodynamics. From the point of view of the environment of a corporation, profit is technically impossible.

The only way an economic unit can declare a profit is to use some kind of power to force other companies; other peoples; other generations or the environment to absorb the costs of production and distribution. As the conservatives often say about other welfare recipients:

There is no such thing as a free lunch: somebody pays.

THE ADMINISTRATIVE JUSTICE SYSTEM You will want to know what the system is, what it does, why it arose and why it is being discarded.

In Diagram V, you can note that there is an Administrative Justice System (A.J.S.) which polices corporate crime in the competitive and "monopoly" sectors of the economy.

The administrative justice system includes the F.T.C., the I.R.S., E.E.O.C., O.S.H.A., F.D.A., S.E.C., E.P.A. and a hundred other state, federal and local agencies. Instead of police and weapons as the technology of social control, the A.J.S. employs lawyers, accountants, economists and other highly skilled functionaries.

Charged with the enforcement of labor laws, occupational safety laws, consumer protection laws, banking and stock exchange laws, and environmental protection laws, the Administrative Justice System represents, putatively, the collective interests of all segments of society.

The A.J.S. is the result of all the laws emerging from social protest movements in the past which had, as their objective, the control of the worst excesses of business. It is the legacy of 150 years of class struggle. Whatever its faults, the limited democracy of America has worked on behalf of social justice in the marketplace.

[Diagram V about here]

The Administrative Justice System attempts to control corporate crime. The various federal, state, and local agencies monitor some 16 millions small and large businesses to determine whether they obey the law. The policing is very loose, the benefit of the doubt goes to the companies, and punishments are extraordinarily lenient for very serious criminal offenses.

Again, corporate crime is the most serious of all forms of crime with the less effort made by the state to control it. At least 335 thousand lives are lost or shortened by forms of corporate activity and at least $200 billion of wealth is illegally transferred from the poorer to the richest sectors of the population. For this crime, as Eitzen notes (1985), all the corporate criminals in all of the history of the U.S. have spent a total of less than 2 years in prison. One can get two years for shoplifting in most states.

Invisible Criminals. Corporate crime statistics are not kept by the F.B.I. nor are corporate crimes widely publicized in the media. The law making, the law enforcing, the law reporting, and the law punishing systems in the U.S. are manipulated by the law makers to protect the corporation and, indirectly, the owners and managers who profit from them.

The only national newspaper which regularly reports on corporate crime is, oddly enough, the Wall Street Journal. But, outside the capitalist class, few read it. For most mass media, corporate crime is invisible. What little is reported is treated as if it were the crime of individual officers, hence white collar crime instead of corporate crime.

How does it Work In the Administrative Justice System, a federal, state or city agency periodically inspects a corporation on which it receives complaints. The agency investigates, charges, prosecutes and penalizes the corporation.

In a typical case, an employee of a government regulatory agency will be sent to look at the procedures of a company...or will review forms sent in as required by law...or will be stationed at the mine, mill, plant or field to inspect compliance with the law.

If a probable cause for action is observed, the government agent is supposed to file a report. The report then goes to the director of the agency or its assistant. The Director makes a judgment of probable cause and initiates proceedings which parallel a court trial for ordinary people.

The company can present evidence, call witnesses and appeal the verdict. If the company is well connected to the Governor's mansion or the White House, its officers can make use of social power to deflect investigation or to set aside the verdict.

If the company is wealthy, it can use economic power with which to hire batteries of lawyers or to bride top officials to drop the case or to reverse the verdict. Corporations make campaign contributions to influential politicians upon whom to call when needed.

Very often there is a revolving door for the top officers of private corporations and the agencies which are supposed to regulate those corporations. There is a web of friendship, private club membership, intermarriage, and old school ties which help deflect investigation, indictment and conviction. G. Wm. Domhoff has reported on these informal, invisible networks at some length in The Powers that Be (1978).

In any case, corporations are loosely policed and seldom punished for crime which, if committed by ordinary people, would get years in prison or call for capital punishment.

Selected Cases Below are some cases in which the various regulatory agencies of the Administrative Justice System responded to specific violations of the laws controlling corporate practices.

*In 1981, an explosion in a Colorado mine killed 15 workers. The mine had received 1133 citations for safety violations. Federal Inspectors had ordered mine owners 57 times to correct known dangers in the mine.

An ABC news report found that in 1974 there were 91,000 fines of coal mine owners in the USA which were uncollected by the federal government amounting to $20 millions.

*In 1981, a Labor Department Judge ordered Harris Bank of Chicago to pay women employees $12.2 million in back wages for their discriminatory salary practices.

The structure of gender discrimination robs women of about 20 to 30 cents of every dollar a male earns for comparable work. Women are better, faster, more dependable workers as a cohort than are men. They get paid less for the same work; for comparable work; and for better work.

*Boeing Corporation charged the Pentagon 1,118 dollars each for three plastic caps which fit over the feet of seats in the AWAC bomber. The caps cost less than $2.00 each.

After retirement from the military, the inspectors in the Pentagon who are supposed to monitor this overbilling are often hired by the companies they regulate. Other inspectors have been punished by their superior officers for blowing the whistle on these corporate crooks.

*Mylan Pharmaceutical Company sell the same pill in the same dosage in three colors. The pink one sells for $6.20 per hundred; the yellow ones sell for $9.20 and the orange ones cost $14.00.

The Department of Health, Education and Welfare which is supposed to police consumer fraud issued a pamphlet to warn consumers. There was no other policing or punishment planned by the H.E.W. officers.

Stan Eitzen of Colorado State University and David Simon of North Florida University report that price fixing costs Americans more than 60 billion a year. They list the goods in which price fixing destroys competition in the same moment it improve profits:

beer gasoline fuel oil auto repair

shoes sports goods swimsuit garbage collection

pipe steel wheels bed springs liquid gas

bread meat packing metal shelves fertilizer

concrete baking flour drill bushings plumbing fixtures

chemicals garage doors auto glass carbon steel

uranium

and many, many more.

These price fixing activities remain even though they are visible enough to get into criminology textbooks.

The President of student government at Colorado State University complained to the State Attorney Generals' Office about the fixing of gasoline prices in Fort Collins. They were 10% higher than elsewhere in Colorado. The State Attorney refused to do anything about it. The students organized a boycott. Prices dropped a few weeks later.

Comparative Sentencing The Bureau of Prisons, in their 1976 report, compared the sentences of white collar criminals to street criminals. The data were

Crimes of the Poor    Months in Prison

Burglary 44.4

Theft (larceny) 31.6

Crimes of the Rich

Embezzlement 10.3

Fraud 11.0

Tax fraud 7.9

Blake Fleetwood and Arthur Lubow of the New Times Magazine have listed typical white collar crimes and what the really, really rich got in the way of profit and punishment.

Distributive Justice. The Administrative Justice System usually operates to force companies to repair the harm that they have done to workers, customers, or competitors. It seldom seeks to punish corporate officers or to terminate the corporate charter to do business.   Retributive justice for the poor; fragments of distributive justice for the rich is the formula used to preserve the lawlessness of the rich.

When thousands of people get sick from improperly prepared food, the Food and Drug Administration closes the plant for a clean-up. When faulty automobiles are sold, the Federal Transportation Administration orders the company to recall the cars and fix the problem.

Although hundreds of workers work die needlessly each year, no one is charged with murder and punished with execution or imprisonment. When a worker dies in industry, a federal agency will issue an order to install safety equipment.

Deregulating Corporate Crime. The Reagan administration has weakened or dismantled the Administrative Justice System and the social welfare system at the same time it has strengthened the Criminal Justice System

During the Reagan years, the Antitrust Division of the Justice department has dropped cases against corporations in the monopoly sector, deregulated several industries, appointed Commissioners friendly to big business to head those agencies, and cut back on funds to enforce the remaining laws.

This parallel effort to weaken the law enforcement capacity of the federal government while strengthening the criminal justice system reveals the class bias of the capitalist state.

Given the fiscal crisis in the USA competing with other capitalist nations for markets in the Third World, this effort to decriminalize pollution, unsafe working conditions, monopoly practices or dangerous additives to food is rational. If justice suffers, that is one of the costs of the capitalist system.

American business cannot compete in the world capitalist system, make profits, pay decent wages, expand, retool, contribute to political candidates, and, at the same time, obey the law.

The conservative solution to all these problems of foreign competition facing business is for the laws to be eliminated or left unpoliced. The liberal solution is for the government to borrow money to help finance some of these costs. The radical solution is to work for better wages and working conditions in the third world. If wages and working conditions were better in the 3rd world, American capitalists would be less likely to move factories and plants.

As you can see from Diagram II, there is a qualitative break between the working class proletariat and the middle class salariat. As you go up the class system, different justice systems deal with the different kind of crime committed by differing classes.

As the system of justice changes, punishment tends to be replaced by benign neglect of crime or by distributive justice coupled with helpful support for the criminal. Support within the middle and upper class social networks permits middle class and upper class crime to continue...despite repeated offenses of a most serious sort.

Middle Class Crime In terms of crimes against property, the middle class is far more criminal than either the working class or the underclass.

The middle class seldom commits crimes against persons. Some authorities will say that wife beating and child abuse is as common among the middle class as among the working class but the preponderance of evidence seems to be that middle class people use economic power and emotional tactics to control wives and children more often than physical power.

In terms of property crime, the case is clear. Middle class people steal far more than do working class people. Crimes are more profitable than those of street criminals. The average street crime nets less than $100. The average white collar crime nets over $100,000. (Table 1, Lecture 11).

The Internal Revenue Service estimates that, in 1989, more than 20 million citizens will cheat the government of about $87 Billion dollars...or 1 dollar for every 5 collected (The Detroit Free Press: 2 April, 1989: B1).

Most of this crime is committed by middle class professionals who have large amounts of income unreported on the W-2. Working class people have almost all of their income reported to the I.R.S. People who work for wages have their taxes deducted by their employers and sent to I.R.S.; people who work for themselves must estimate their own income and send in the taxes themselves.

Income tax fraud, expense voucher cheating, petty and grand theft larceny, as well as sexual harassment and exploitation of clients are commonplace among the middle class salariat and self-employed professionals.

Of the two major justice systems which control the middle classes: the private justice system is widely used to control white collar crime of lower level employees of the firm as well as customers. The Peer Review System is used to control criminal professionals: doctors, lawyers, stock-brokers, pharmacists, college professors and nurses for example.

Let's begin with the private justice system so you can see how it works...then we will look at the Peer Review System.

THE PRIVATE JUSTICE SYSTEM The corporate world constructs a private police force to serve its private goals in policing and in social control of workers, customers, and competitors. In addition there are private courts and private prisons which constitute part of the Private Justice System. You have learned about private prisons in the Lecture on street crime.

THE PRIVATE JUSTICE SYSTEM IS USED TO POLICE AND IMPRISON THE WORKING CLASS AND SURPLUS POPULATION; THE CIVIL COURT SYSTEM IS USED TO RESOLVE DISPUTES BETWEEN ELEMENTS OF THE MIDDLE CLASS; THE PRIVATE JUSTICE SYSTEM IS DESIGNED TO POLICE ON BEHALF OF THE CAPITALIST CLASS.

Private justice systems have few constitutional protections. The judges are usually top echelon managers. Justice is swift and irreversible. For most, there is no appeal. The employee is fired. The customer must pay for what has been pilfered or face the Criminal Justice System Only the wealthy can afford to contest a national retailing corporation in a public court room.

The Private Security System The Private Security System is large and growing. There are about 870,000 police who staff the Criminal Justice System but there are over a million private security officers. The Private Justice System is owned and operated by private corporations which hire or lease security services to private companies.

Most of the private security is found in the monopoly sector since that's where the most crime against business is located. Private security agents such as outside auditors, temporary 'employees,' or computer detectives monitor middle managers because they have the trust of the company and can use that trust to commit theft and conversion for personal profit on a large scale.

In the small business sector, owners are present and the work force is small enough to be watched daily and hourly. And in most small businesses, owners know and trust workers. There is a personal relationship in small business which encompasses a human concern for workers and customers missing in corporate giants. If a trusted employee has financial trouble, the small business owner will know and may help.

In the large corporation, the employee's difficulties are not known nor are they aided. In any event, the employee in a small business knows the owner could easily identify whoever stole any significant funds. Small businesses cannot afford to hire private security patrols and must rely on the Criminal Justice System for protection.

The form of justice in the Private Justice System is ordinarily distributive. The customer or employee must restore conditions to their original state before the theft or conversion.

Usually the guilty customer or the guilty employee is only too happy to make things right rather than face the embarrassment and the inconvenience of the Criminal Justice System Corporate officers are often helpful and lenient in the terms of payment and repayment.

There is a minimum of adverse publicity and public disgrace since corporate officers wish to avoid such publicity. The culpable employee could make much mischief were s/he treated too shabbily...especially middle and upper echelon employees.

If someone is following him, watching him, investigating him, protecting him or guarding his treasures, it is far likelier to be a private policeman than the CIA, the FBI, or the county Sheriff.

                                                    ...San Francisco Examiner

Growth of Private Security The Private Security System is large and growing for a variety of reasons. Let us take a quick look at the more important factors stimulating the growth of private police forces.

1. Shoplifting, checkwriting and employee theft varies with economic conditions.

In the U.S., a large and permanent underclass of the working poor and the unwaged has grown. People in this stratum reunite production and distribution by crimes including theft from both large and small business.

2. Hostility toward big business continues.

Several factors combine to produce hostility: take home pay of lower echelon workers has declined since 1969. Corporate crime is occasionally publicized. Corporate profits in the monopoly sector hold firm at 15% despite this economic crisis. To steal from the rich resonates with the populist attitudes of America. It is a pretheoretical form of street justice.

3. Life crises of employees, especially white collar employees, continue.

Home foreclosures are at an all-time high rate since the 30's. Divorce brings about financial troubles for the employees of corporations. Economic cycles affect the retirement investments of employees, some of whom have opportunity to steal from the corporation to protect their retirement plans.

4. In every organization there are any number of employees who, rightly or wrongly feel they have been treated unfairly by the company.

Passed over for promotion, subjected to personal humiliation by 'superiors,' cheated of credit for creative work or simply angry at company policy or at working conditions; these employees spend time thinking about how to get even. Theft is sweet revenge for some.

5. Preemployment investigation is a large and growing business.

Drug use, employee theft, and undisclosed problems with alcohol, at former jobs, or family crisis create problems of cost and profit for the employer.

These factors: employee theft, vandalism, and unwanted personal habits or working practices produce the growth in the Private Security System.

Private agents watch workers closely for:

theft fraud waste of time

falsification forgery inadequate

of records supervision

sabotage of working on union organizing

machinery personal talking about things

or products business other than company business

Who are the Private Police? Most private police are men who aren't equipped to find work elsewhere. They are low paid guards who work long hours to make a living. Douglas Timmer, a criminologist who specializes in the area, says private police often lack the basic physical, mental, educational or, in some cases, age and citizenship requirements to compete for better jobs.

Private police have high rates of turnover since they may have criminal records or may violate their position of trust by stealing from the companies they are assigned to guard. Many do such work as a second job...city police often hire out to bars, shopping malls, or sports events to pick up spare change. In Denver, some 60% of the city cops moonlight. They are permitted to work 32 hours on private policing. At least they are trained in professional police work. That is not the case for most private security guards.

They lack basic understanding of criminal law, due process or civil rights. They do what they are told to do by low level managers whose goal is profit and loss rather than human rights or social justice. They fill out a simple form, are asked if they have a phone or a criminal record; are given a uniform and gun and let loose on the customers and employees of a firm.

Where do they Work? Private police are found everywhere: in apartment buildings, shops, department stores, office buildings, factories, museums, schools, universities, hospitals, theaters stadia, buses, and subways. Insurance companies use them; loan companies use them and defense attorneys in criminal cases hire them to discredit witnesses.

The owner of Magic Market pays for over 30,000 lie detector tests each year to check out prospective employees. More than 100 of the Fortune 500 companies use lie detectors. Many firms require testing for drug use before employment. There may soon be mandatory medical testing for AIDS. Insurance companies hire investigators to check out fraudulent insurance claims.

Jules Kroll Associates investigates public securities crime. He charges underwriting firms up to a million dollars for protecting the offerings from leaks. Such offerings usually exceed $100 million. A leak can produce huge profits. Ivan Boesky stole over $100 million from stockholders who sold him stock without knowing its real market value. Boesky bought information from insiders to steal. If you have seen the movie, Wall Street with Michael Douglas, you know how it works.

William Callahan, a former Justice Department lawyer, founded Unitel, an private police agency in New York, to detect and control white collar crime by senior executives. He says that he has never been busier. His five investigators are handling 30 major cases. He charges $100 per hour.

Bureaucratic Control Money could be saved and profits increased if the policing function were paid for by taxpayers but there are good reasons for firms to avoid the police whenever possible.

If the private corporation uses public police officers to protect them from theft, that would mean the continued presence of a policing force not directly under the command of the corporate hierarchy. Public police would inevitably have proper cause to police the top echelon and the organization itself. Since most white collar crime by company employees is committed by that top hierarchy, it would be inviting discovery were there permanent public policing presence on the grounds.

There is, also, a sort of 'gentleman's agreement' that one does not call the cops on associates in the business and professional world. Top business executives belong to the same clubs, party together, work on the same voluntary organizations, go to the same churches and occasionally marry each other. A certain solidarity exists among the top layers of the middle class.

And, for upper middle class shops, stores, and firms, any hint of routine policing by uniformed police officers would drive away customers. The upper middle class do not care for the presence of police in their lives at home, in office or while shopping.

For those stores which mass merchandise goods to the working class, especially to minorities, company managers do not hesitate to call the city police. Corporations which retail in minority or poorer sections of town have little compunction about calling in the public police.

The public courts are overcrowded and the delays in hearing cases run into the months and years. For many cases, company staff and company lawyers would be tied up in the public court system; reimbursement would be delayed and newspapers would pick up on the cases since they would be a matter of public record.

Taxpayers object if public police are assigned to police on behalf of companies when neighborhoods are unprotected. With the fiscal crisis of the city, such costs would be politicized.

Some of the police on some of the police forces of certain cities are too dishonest to be trusted with some of the policing of the corporate world. The police of Denver routinely filled up the trunks of their police cars with food, clothing and electronics when called to a late night burglary. The police of New York, Detroit, Philadelphia, and Los Angeles have periodic outbreaks of police corruption. The city of Chicago tolerates the most criminal police force in the USA.

The distaste for and mistrust of the police by the middle classes informs much in the way of preference for the private security system...and, as you will see, the peer review system and the medical justice system.

Hence private security costs, transferred to customers through higher prices, are preferable to the potential threat of public police forces and the dollar loss entailed with punitive systems of control.

Franchise Justice The most recent form of privatization in the justice system is to be found in private courtrooms. There are several national franchises which offer fast and low cost justice to plaintiffs and defenders. Judicate is one such system which renders judgments binding on both parties.

Judicate has franchises in all 50 states, Puerto Rico, Guam and the Virgin Islands. Judicate judges charge a fee for each case based on how long it takes to hear the evidence. The judges are usually experts in the case at hand and all are former judges. In the public court system, a case might take five or ten years to get on the court calendar. In private courts, such cases are resolved in days or weeks.

Other such private courts are available from EnDispute, another private justice service. The American Arbitration Association also has members who render judgments for a fee to those who can afford the price.

There is much to be said for such services, the judges are impartial, expert, experienced and available. The negativities are the fee-for-service feature which eliminates most poor people from access to such legal service much as in other market places. Judges must consider the market in making decisions as well. Too many decisions in favor of customers or workers would mean the end of business from large corporations or from law firms...and fees would disappear.

Theory Spitzer and Scull (1977) explain the growth of private justice as part of the rationalization of the productive process. As competition and conflict increase, corporations must control every phase of production and distribution if they are to make a profit.

Management conflict with workers over wages and working conditions eliminate workers from self-policing. Conflict with customers mean they have to be watched or they might shoplift. Conflict with competitors means they have to be watched for price changes, new products, and the planting of economic spies. If workers, customers, suppliers, and competitors weren't watched, the economic process would breakdown under these conditions of conflict.

The structures of race, class, gender, age, and nationalism all entail conflict in these times. Where there is social conflict, there must be social control. In every case, the rich and powerful hire and direct the police to control the poor and the unorganized in order to maintain stratifications of wealth and power.

There are two non-punitive systems of policing of white collar crime and the middle classes. First you can learn about the Peer Review System.

THE PEER REVIEW SYSTEM A Peer Review System handles the offenses of a professional group.

The peer review system consists of colleagues of a professional person. If a client complains that a professional person has violated the position of trust implicit in the social relationship between the two for the personal advantage of the professional, the client can file a complaint to one of the many self regulatory Boards established by various professions: law, medicine, cosmetology and such, to adjudicate complaints.

Most states concede jurisdiction over a wide variety of crimes to these private agencies. The thought is that only another professional can really understand the facts of the case. In such cases, the corpus of the crime can be recognized most clearly by one who is an expert in the field. Average citizens could not judge whether a crime was or was not committed.

There is much merit to such a method of judgment...indeed, it is found in the American Constitution which calls for a jury of one's peers in adjudicating guilt or innocence.

The injustice of this justice system arises in the fact that juries of professional persons routinely exclude those persons to whom harm has been done. The PRS becomes a jury of one's friends who may have little interest in distributive justice for students, patients, clients, or the general public. A client could file suit in Civil or Criminal courts. More and more victims of professionals are doing just that.

However, law making bodies still exempt professionals from public policing and accept in-house policing and adjudicating procedures. That is one reason why there are so few white collar people in prison...not because they are white and wealthy; and thus more law abiding...but rather because they set up private policing and justice systems which are much more advantageous to them.

Who is Controlled? If one is accused of a crime by one's client, one is policed and tried by one's peers, who are also one's colleagues, partners, schoolmates, friends and references.

The Peer Review System has the advantage of protecting professors, lawyers, referees, doctors, accountants, real estate agents, police, legislators, judges, dentists, stock brokers and other quasi-autonomous groups, to a large degree, from policing by the various law-enforcing bodies. 

Policing of the P.R.S. is casual, loose, infrequent, gentle and forbearing. Usually such complaints are dismissed by the Chairperson of the hearing committee. But if a complaint does go before a jury of one's peers, the results are far different from those of the Criminal Justice System

Middle class college professors who teach while drunk, who harass students sexually, who convert state property to private use, who use drugs or who work at other businesses in conflict with their teaching and research responsibilities are seldom tried or sanctioned by their peers.

Doctors who overprescribe, overcut, overcharge and conspire with colleagues to overconsult are overlooked by the P.R.S. Ordinarily, only flagrant and repeated abuse will trigger the P.R.S.

Lawyers, C.P.A.s, stockbrokers, bankers, psychologists, real estate brokers, sociologists, and nurses as well as priestly functionaries and a dozen other professions claim exemption from the Criminal Justice System on the grounds of esoteric knowledge or special conditions. Such groups use that dispensation, as well, to cover up the vast harm they do to the clients with whom they have a special trust relationship.

Friedson (1984) notes, such control systems do two things for professionals:

1.They provide a special shelter in the labor market.

2. They help professionals maintain control over their own fate.

and I will add, 3.  They provide structural protection from the Criminal Justice System.

There are other models in which professionals are accountable to outsiders. They could be accountable to an elite for rules set by another elite indeed that is a major trend as those in real estate, law, medicine, brokerage and other independent professionals go to work for large companies.

Professionals could be accountable to their clients. Pepinsky (1985), suggests a face to face mediation in which doctors, lawyers, and professors would be required to work out a just response to white collar crime with their victims...in the presence of a neutral third party.

How the System Works Typically, a doctor or lawyer or professor will be charged with some form of flagrant violation of a trust relationship. If the complaining party has sufficient social power, a panel of peers will be constituted and a semi-formal hearing of evidence will be undertaken.

If the evidence is compelling, some token penalty will be imposed. If the case is especially egregious, the professional person can be subjected to heavy penalties; they can be disbarred, decertified, defrocked or dismissed.

As far as the Criminal Justice System is concerned, the case is be closed. The Criminal Justice System and the Administrative Justice System will honor these pro forma hearings as having satisfied the need for justice. As a rule, there is no appeal and little justice. The P.R.S. is more a guardian of the privileges of a profession than a social control agent.

Selected Cases The New York Times (12-1-85, p.1A) reports that of 80,000 practicing lawyers in New York State, there were 8,766 complaints made to the various County Bar Associations in 1983. Of these 8,766 complaints, 131 lawyers were disbarred or suspended and 12 were censured. Most people who are the victims of professionals do not bother to seek justice in the P.R.S.

--James Dunn (pseudonym), a Denver lawyer was disbarred from the practice of law in the State of Colorado. He had systematically looted the escrow accounts of which he had control; he took retainer fees from clients and did nothing to prepare for their legal defense. As trustee of an estate under probate of a deceased client, he refused to release funds to heirs. Dunn did not go to prison nor did he return the money.

--Robert Lowery (pseudonym), a doctor, was removed from the practice of medicine in the State of Florida. Lowery had defrauded the Medicare program of $2.3 million dollars in fraudulent billings. When poor women came into his clinic to get treatment for their children, he required his clerks to get the mother to sign forms in blank. He then ordered clerks to fill them out for several expensive procedures not provided. Lowery did not go to prison. He went to Colorado where he now practices medicine.

--Mary Alice Hill was fired from Colorado State University. Professor Hill taught phys ed classes and coached the Women's Track Team. She was also Director of Women's Athletics. Hill was accused by her Department Chairperson of 22 counts of bad teaching. Ms. Hill appealed the decision through the Grievance Procedures of the university.

A panel of five professors from other departments listened to the evidence and decided in favor of Professor Hill. The university gave her a contract for another year.

The next year Professor Hill was fired because 'she did not have a Ph.D.' Ms. Hill appealed for the second time. Again the faculty panel found her to be a good and qualified coach and teacher. The University appealed the decision to an outside arbitrator as was possible with 3-2 split decisions. He ruled that the university could fire anyone for any reason if they did not have tenure. The substantive merits of the case were subordinate to the administrative policies...which the administration had set up in the first place.

It turned out that Ms. Hill had proposed a fivefold increase in the budget for women athletics at C.S.U. The Chair of the department and the Director of Athletics, both males, thought that such demands would detract from the athletic program for men. They fired her twice.

The university finally succeeded in removing Ms. Hill from the faculty but a Federal Judge awarded Ms. Hill actual and punitive damages. Three administrators were ordered to pay $3000 fines for violating her legal rights to act on behalf of women students.

Demise of PRS The days of the Peer Review System, then, may be numbered. In its 11 January 1987 Report an American Bar Association Commission urged that lawyers who filed "frivolous" law suits be disciplined by the State.

This recommendation met with great opposition on the part of the State Bar leaders. They objected to non-lawyers engaged in the sanctioning of unethical lawyers in that they would be policed too "aggressively."

The Commission Report was changed to recommend that " discipline of lawyers should continue to be the responsibility" of senior lawyers "in order to safeguard the rights of all citizens." (Orlando Sentinel, 15 Feb. 87). It is not clear how such a system of social control safeguards any but the lawyers themselves.

Much as the religious system of justice disappeared as secular law arose under the control of the rich and powerful, the peer review system is likely to disappear. The growth of legal and medical franchises puts professionals under the scrutiny of a managerial class. The growth of civil suits invades the peer group process and rips it asunder to get at the professional offenders.

Civil Law Damage suits against professionals are increasing. More and more people are losing confidence in the peer review system as a way to safe guard the common interest. They are turning to Civil Law for remedy. You will want to know, in theoretical terms, why civil law develops and why it is parallel to the criminal justice system. Here is the socialist analysis.

In a society oriented to private accumulation, pathological individualism as well as class, gender and racial antagonisms, trust relationships are easily transgressed by professionals. English law, in order to exclude and thus protect merchants, made a distinction between torts and crimes.

Torts are defined as private matters to be settled in civil court; crimes are defined as public matters to be settled in the criminal justice system. Such definitions effectively protect all most all white collar professionals as well as corporate officers from the criminal justice system.

As professionals become more rapacious, more indifferent to the fate of their clients, and closer to retirement, civil suits increase. That is the only venue where a person can gain redress for being cheated, conned, tricked or otherwise dishonest.

As doctors, lawyers, stockbrokers and others become wealthier, they become likely targets for civil action given reasonable cause. As lawyers become less collegial (as far as other professionals are concerned), they begin to prey upon the real and imagined wrongs done to the clients of professionals. Even students are beginning to use civil law to sue their professors.

The inequities of law vary between systems rather than within systems, substantive injustice is preserved while technical justice prevails. Inequality, between differing systems of justice, with a rough equality within each system provides an illusion of justice in an unjust society.

The Corporatist State Parallel justice systems arise out of the great difficulty to bring rationality into an irrational market. As Richard Weiner (1985) of North Florida University points out, the U.S. is a corporatist society in which the capitalist state functionaries assign social and moral power to competing interest groups for the day to day operations of the economy but retains the social and economic power to control competing interests when such competition threatens the integrity of the whole economy. Thus, American society is a corporate entity under the de facto control of private enterprize. If the state ran things directly, it would be a fascist society.

The assignment of policing authority to private organizations via the Administrative Justice System, the Peer Review System, the Private Justice System, the Medical Justice and the Religious Justice systems is rational in that it decentralizes decision making, simplifies it, and facilitates response to local conditions. This is a good principle of governance in any society. However, in a society marked by inequality, justice can vary greatly between strata.

The prior question is, of course, why the state intrudes at all in the private sphere--why not assign all control functions to competing entities in the private sphere?

Even the most liberal of capitalist states must control corporations and the rich beneficiaries of private corporations.

Here are the reasons why the capitalist state tends to grow:

*Irrationality

Assignment of all control processes to the free market builds into the economy a great irrationality. The dynamics of the free market produces a concentration of wealth. Resources flow from the small business to big; from low profit lines of production to high; to one ethnic group from all others.

This is irrational in the long term since every economic system is interdependent. The deprivations of one sector, in due time, impairs the operation of other even stronger and wealthier sectors. On the level of organizational level, this is institutional imbalance.

*Economic Crisis

Capitalism tends to go through Kondratieff cycles. When business falls off, both owners and workers demand help from the state sector.

The state enters, in limited fashion, with subsidies, grants, loans, and laws to control the crises.

When the state gives help to business, other interest groups demand that the state watch to see that the money is spent for the purpose intended. Sometime, people demand the state make the company do something for women, minorities or the larger welfare of the country in order to get the money.

*Inequality

Capitalism tends to produce inequality. In democratic capitalist states, politicians help keep the gap between the rich and poor within reason.

Therefore, the state redistributes wealth that has accumulated to doctors, employers, giant corporations, to Anglo owners, and to rich families. The wealth is redistributed to needy patients, marginal workers and the disemployed, to excluded minority groups and to families in need.

*National emergency

The dynamics of the marketplace tend to ignore collective needs in favor of individual needs. In times of war, famine, drought, epidemic or other emergency, the state steps in to regulate the economy.

During WWII, the Korean War, Viet Nam and other wars, the federal government told the private sector what to produce, how to share it out, what price they might charge, the profit margin they might take, and the countries to which they must, or must not send goods and services.

Under the conditions above, the state regulates the economy. The state uses the social, moral, economic and physical powers of the state to define what is legal or illegal. It uses the same powers to enforce the law and to punish the corporations which violate it...unless the corporation is well connected.

At the same time as there are pressures on the democratic state to police on behalf of the rich, there are pressures from below for the state to police the rich...thus does the corporate state emerge out of the struggles to see who can exploit whom and who can use the state for their own private interests.

Parallel justice systems arise to satisfy the need for political legitimacy, political control, market rationality and foreign competition.

Why is the Administrative Justice System Dismantled? Mr. Reagan became president in a society marked by programs of social justice established in the 30's, 50's, 60's and 70's. He took office just as American business was losing its market hegemony in the Third World to Japan, Germany, South Africa, Korea, Taiwan, Hong Kong, Brazil, Israel and other competitors. Liberation movements fight to keep more wealth within the borders of El Salvador, the Philippines and Nicaragua.

The Reagan solution to the resulting fiscal crisis was to downgrade the system of administrative justice, to reduce expenditures for programs of social justice in the U.S., and to contain movements toward social justice in the Third World.

Justice in America is dependent, in part, upon the U.S. supporting the vast injustice of the world economic order.

Justice and the various justice systems are mediated by and reproduce the four great stratifications of power, wealth and social honor in America: the class system, the gender system, the system of racial discrimination, and the system of international privilege.

THE CIVIL JUSTICE SYSTEM.  The Civil Justice System has exploded in the past 40 years.  It is the one venue where the rich find, to their great discomfort, justice.  A private citizen with limited resources can scarcely go up against a wealthy corporation but  a class of persons can do so.  Class Action suits are a major weapon in the effort to bring the capitalist class to the bar of justice.

The tobacco companies have been sued for billions...and lost in Civil court cases.  Manufacturers of faulty or dangerous products can be sued by aggressive lawyers enlisting member of a group injured by a product.  Dow Chemical has had to pay out millions to women injured by silicone breast implants.  Ford Motor company has had to recall and fix thousands of vehicles as has had Ford and General Motors.  Companies which pollute has had to pay millions in damages and repairs to the land, air and water systems they have despoiled.

And, given legal recourse via the Civil Court System, there is considerable pressure on both state and federal representative to limit damages to 'fair' amounts, 'reasonable' amounts, 'proportional' amounts.  And, bought by campaign donations, representative in several states have done so.  Bought by campaign contributions, dozens of Republican Congress-persons and Senators have sponsored legislation to protect the wealthy from the effects of   crimes against customers, workers, competitors and the State itself.

A THEORY OF JUSTICE IN EVERYDAY LIFE  Egalitarian politics require good theory. Most theories of justice deal with the notion of justice in the abstract...what we should do rather than what is.

Propositions about Justice in America:

1. Forms of justice vary across class and racial lines. Retributive justice is applied to the poor and oppressed; distributive justice to the rich and powerful.

2.Public and private policing is focused primarily upon the working poor and the permanent underclass.

3.The Black community is subjected to more systems of repressive justice than is any other major population group. Some Indian tribes fare worse; among them the Navajo.

4.Women outside the home are policed mostly by social workers, therapists and psychiatrists than by the criminal justice system.

These systems complement the policing function of the male in patriarchal societies. Together they work to keep women at home doing unpaid domestic service and childcare duties.

5.Corporate crime is the most dangerous form of crime and the least well controlled.

6.The Medical Justice System tends to divert middle class criminals from the Criminal Justice System.

7.Peer Review Systems tend to protect and exculpate professional groups from the Criminal Justice System. When sanctions are applied, they tend to be token fines.

8.The effectiveness of the Administrative Justice system varies with the accumulation needs of private capital.

The Administrative Justice System embodies concern for the common good as workers' and citizens' groups are able to force legislation through the law-making institutions during favorable economic conditions.

9.In times of economic crisis, retributive justice increases to put more unemployed males in prison while distributive justice increases to reduce rebellion and calls for radical change in the political arena.^*

10.The Private Justice System provides private corporations more rational control over rule-making, policing, enforcing, adjudication and punishment of employees and customers.

11. The Religious Justice System is often inimical to the privileges of power and wealth. It is declining except among the working poor.

12.The Military Justice System is an adjunct to the Criminal Justice System The M.J.S. controls the young men, mostly minority group members, forced into the military by labor market dynamics.

13.Systems of popular justice arise when the state takes sides in class, racial, or other struggles. Some popular justice groups work to secure social justice: some oppose.

14.Justice in America tends to produce and to reproduce the structures of inequality.  The poor go through a mean-spirited and brutalizing Criminal Justice System; the rich go through more accommodating, more forgiving justice systems; Peer Review, Administrative or Medical Justice Systems.

15.  There is a rough equality within a given justice system but great disparities as between justice systems; thus equality before the law is maintained while a much larger inequality continues to immiserate the poor and corrupt the pursuit of justice.

16. Much of the anger and outrage against the rich is diverted to pre-theoretical avenues since both law and politics protect the rich.  Workers steal from companies; customers shop-lift.  Poor ethnic young men and women vandalize.  Seeing justice distorted by wealth and power, police officers go on the take.

All of these justice systems, taken together, comprise the formal social control apparatus of advanced industrial society with private ownership and marketplace dynamics oriented to private profits.

A wide variety of crimes grow out of the ordinary, everyday workings of profit-oriented economies. Social control systems informed by differing justice imperatives arise to control that crime. Each system has a different social location; polices a different class stratum; and uses a different philosophy of justice. Together, these various justice systems have very little effect in controlling crime or correcting criminals.

For the rich and powerful, there is wealth, acclaim, and benign neglect of the crimes they commit. In the unlikely event the harmful activity they create is defined as illegal, they are not likely to be policed. If they are policed, they are not likely to be prosecuted. If they are prosecuted, it is highly unlikely they will serve time in prison. When the rich and powerful are arrested, convicted and sentenced, they usually face small fines or are put on probation.

The Black community is heavily policed by the criminal justice system and, for Black women, the welfare system. The religious system of control also is central to the social control of Blacks.

Middle class women are caught up in a web of social control at the center of which is patriarchy backed up by the medical control system. In the patriarchal system, women are controlled by fathers and then by husbands. Since most middle class women also work, they are subject to the controls of large scale bureaucracies...also run by males.

For poor women of all groups and their children, the welfare system, religious systems, the system of patriarchy and their bosses on the job all comprise a interrelated meta-system of social control. The lives of women have to be controlled in order to contain them within the structures of unpaid or low paid productive labor.

The social and economic costs of all these control systems; their inability to control crime; the vast injustice that discredits the state: the great increase in crime as well as models of low crime societies around the world all argue that we should go beyond crime and punishment toward social justice. That is the subject of the next and last Lecture.