Question

3. Why is it capitalist system conducive for white-collar crimes?

Answer 1

3.

Capitalistic economic system is driven by the market forces and it becomes more suitable and conducive to such crimes, because government has lesser interventions, higher level of deregulation and firms management having bigger role in decision making process. It creates an environment that creates bigger scope for the management to commit white collar crimes.

These crimes can only be conducted when there are lack of regulatory and risk management framework and government does not intervene in business operations. It makes company's management to make fraud, do moral hazard in decision making process and try to deceive the investors by doing window dressing of accounts. These acts are performed with ease when there is a capitalistic system.