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What If the “Broken Windows” Theory Were Applied to Wall Street?

James Q. Wilson's famous “broken windows” theory led to strict policing of working class behavior. What if his ideas were applied to Wall Street?
 
 
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James Q. Wilson, who died recently, was a political scientist who often studied the government response to blue collar crime. The public knows him best for his theory called " broken windows." The metaphor explains what happens to a vacant building when broken windows are not promptly repaired. Soon, most of the windows in the abandoned building are broken. The criminals feel little compunction against petty destruction because the building’s owners evince no concern for the integrity of their building. Wilson took social norms, community, and ethics seriously. He argued that as community broke down, fewer honest citizens were active in monitoring and policing behavior. The breakdown in community lled to widespread serious blue collar crime. Wilson urged us to take even minor blue collar crimes and breaches of civility seriously and to demand that they be contained through social pressure and policing.

New York City’s police strategy embraced “broken windows,” making it a priority to respond to even minor offenses that upset the community – like “squeegee men,” graffiti, and street prostitution. Reported blue collar crime fell. It also fell sharply in most other cities, which did not implement “broken windows” programs, but Wilson and the NYPD got the credit and popular fame. Wilson became one of the most famous blue collar criminologists in the world.

Wilson’s broken window theory remains controversial among many blue collar criminologists. As a celebration of his life and research, I offer this discussion of applying “broken windows” theory and policies to elite white-collar crime.

Wilson was strongly conservative, and his research focus in criminology was almost exclusively blue collar crime. That was a shame, because “broken windows” theory is most compelling in the context of elite white-collar crime. Such an application, however, would have been outside Wilson’s comfort zone. Wilson tended to use the word “crime” to refer exclusively to blue collar crime and his emphasis was on very low status criminals. In Thinking About Crime, Wilson argued that criminology should focus overwhelmingly on low-status blue collar criminals. 

"This book [does not deal] with “white collar crimes”…. Partly this reflects the limits of my own knowledge, but it also reflects my conviction, which I believe is the conviction of most citizens, that predatory street crime is a far more serious matter than consumer fraud [or] antitrust violations … because predatory crime … makes difficult or impossible maintenance of meaningful human communities (1975: xx).

I am rather tolerant of some forms of civic corruption (if a good mayor can stay in office and govern effectively only by making a few deals with highway contractors and insurance agents, I do not get overly alarmed)…." (1975: xix)"

Notice that Wilson’s explanation is antithetical to his “broken windows” reasoning. There are, of course, relatively minor white-collar crimes. Wilson emphasized that it was the willingness of society to tolerate relatively minor blue collar crimes that led to social disintegration and epidemics of severe blue collar crimes, but he engaged in the same willingness to tolerate and excuse less severe white collar crimes. He predicted in his work on “broken windows” that tolerating widespread smaller crimes would lead to epidemic levels of larger crimes because it undermined community and social restraints. The epidemics of elite white collar crime that have driven our recurrent, intensifying financial crises have proven this point. Similarly, corruption that is excused and tolerated by elites is unlikely to remain at the level of “a few deals.” Corruption is likely to spread in incidence and severity precisely because it undermines community and the rule of law. It is likely to grow more pervasive and harmful the more we tolerate it.

 
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