**3. Origin of the American Dream theory**

The term "the American Dream" was introduced into contemporary social analysis in 1931 by historian James Truslow Adams to describe his vision of a society open to individual achievement. Interestingly, Adams sought to have his history of the United States*, Epic of America*, entitled *The America Dream*, but his publisher rejected the idea, believing that during the Great Depression, consumers would never spend three dollars "on a dream." (Adams 1931, p.68). The term soon became a sales slogan for the material comforts and individual opportunities of a middle-class lifestyle: a car, a house, education for the children, and a secure retirement.

The persistence of the term "the American Dream" over subsequent decades is documented in the work of Elizabeth Long, who has analyzed cultural changes in the United States during the years following World War II. Long examines the shifting meanings of the dream of success as reflected in best-selling novels published between 1945 and 1975. She concludes that the core components of the American Dream were reflected in popular writings throughout the thirty-years period following World War II (Long 1985, p.196).

An "American Dream" theory of crime in the United States was introduced into contemporary sociology by Messner and Rosenfeld (1994). They developed the American Dream theory as an extension to the "Anomie" theory associated with the work of the American sociologist Robert K. Merton (1938). A central idea of Merton's Anomie theory is that motivations for crime do not result simply from the flaws, failures, or free choices of individuals. A complete explanation of crime ultimately must consider the sociocultural environments in which people conduct their daily lives. Merton argues that the social system in the United States is a prime example of a system characterized by internal strain and contradictions. Specifically, Merton observes that an exaggerated emphasis is placed on the goal of monetary success in American society, coupled with a weak emphasis placed on the importance of using the socially acceptable means for achieving this goal. We realize that American capitalism put emphasis on socially acceptable means for financial success, such as competition. In addition, American education system put some emphasis on socially acceptable means for financial success, such as collaboration. However, as pointed out by Merton (1938), a key issue here is the exaggerated emphasis on financial success in a capitalist society that leads to socially unacceptable means. The result of these sociocultural environments is a pronounced strain toward anomie, that is, a tendency for social norms to

The American Dream and Corporate Executive Fraud 203

goal is to pursue the American Dream by "any means necessary." This anomic orientation of

We caution against an overly simplistic interpretation of American culture. The United States is a complex and, in many respects, culturally pluralistic society. It neither contains a single, monolithic value system nor exhibits complete consensus surrounding specific value issues. We nevertheless concur with Hochschild's (1995, p.xi) that the American Dream has been, and continues to be, a "defining characteristic of American culture," a cultural ethos "against which all competitors must contend." In addition, we believe a better understanding of corporate executive fraud is possible by relating three key features of the American Dream theory (Intense emphasis on monetary success, Corporate executives exploit/disregard regulatory controls, and Corporate executives justify/rationalize fraudulent behavior) with the three variables of the Fraud Triangle concept (Pressure,

An intense emphasis on monetary success in the corporate environment, which promotes productivity and innovation, also induces fraud by corporate executives. Messner and Rosenfeld (1994, p.8) argue that monetary success, which is responsible for the impressive accomplishments of American society, is also responsible for generating strong pressures to succeed in a narrowly defined way and to pursue such success by "any means necessary" including fraud. In other words, while monetary success has provided the motivational dynamic for entrepreneurship, corporate expansion, extraordinary technological innovation, and high rates of social mobility, it also has provided the motivational dynamic for greed,

**4.2 Corporate executives exploit/disregard regulatory controls (Opportunities)** 

An intense emphasis on monetary success leads to a pronounced strain toward anomie, that is, a tendency for corporate executives to exploit/disregard regulatory controls for monetary gains. The American Dream embodies the basic value of materialism that has been described as "fetishism of money" (Taylor et al. 1973, p.94). We realize that Americans are not uniquely materialistic, for a strong interest in material well-being can be found in most societies. Rather, the distinctive feature of American culture is the preeminent role of money as the "metric" of success. Orru succinctly expresses the idea in the following terms: "Money is literally, in this context, a currency for measuring achievement" (1990, p.235). This monetary value orientation contributes to the anomic character of the American Dream:

1 We should clarify that anomie is not only engendered by 'limited access' of social actors (i.e., CEOs) to legititmate means of achieving goals. Rather, deviance becomes a tempting and a viable option given the 'limited availability' of legitimate means, which is probably the critical reason why social actors resort to different means not only with the end of achieving the goals, but to "lighten the pressure" of attaining socially sanctioned goals (e.g., money, success, material opulence). 2 Keane (1993) found some evidence of a latent relationship between corporate pressure to maximize

the American Dream helps explain top executives' tacit approval of corporate fraud.1

**4. The American Dream theory and Fraud triangle concept** 

**4.1 An intense emphasis on monetary success (Pressure)** 

corporate fraud, unethical behavior, and illegal act.2

financial performance and corporate crime.

Opportunity, and Rationalization).

lose their regulatory force. Originally, an 18th century French sociologist, Emile D. Durkheim, defined the term "anomie" as a condition where social and/or moral norms are confused, unclear, or simply not present. Durkheim felt that this lack of norms – or preaccepted limits on behavior in a society – led to deviant behavior such as individual suicide or executive fraud (Giddens 1972, p.184 – in *The Division of Labor in Society* translated by George Simpson). Later, Richard Cloward and Lloyd Olin (1960) expanded Merton's Anomie theory to include circumstances that provide the opportunity for people to acquire through illegitimate activities, such as gang activities, what they cannot achieve through accepted methods.

Messner and Rosenfeld (1994) observe that Merton's Anomie theory does not provide a fully comprehensive sociological explanation of crime in America. They argue that the most conspicuous limitation of Merton's theory is that it focuses exclusively on one aspect of the American social structure: inequality in access to the legitimate means for success. As a consequence, it does not explain how specific features of the broader institutional structure of society interrelate to produce the anomic pressures that are responsible for crime. Messner and Rosenfeld (1994, p.66) developed an institutional anomie theory similar to Merton's and called it the "American Dream" theory with specific reference to four social institutions – the family, the education, the polity (political system), and the economy. The institution of family bears the responsibility for the care of dependent persons and to provide emotional support for its members. The institution of education bears the responsibility for transmitting basic knowledge to new generations and to prepare youth for the demands of occupational roles. The institution of polity bears the responsibility for protecting members of society and to mobilize and distribute power to attain collective goals. Finally, the institution of economy bears the responsibility for the production and distribution of goods and services.

A basic tenet of Messner and Rosenfeld's (1994) American Dream theory is that the pursuit of monetary success (i.e., the institution of economy) has come to dominate the American society, and that the non-economic institutions (i.e., the institution of education, the institution of polity, and the institution of family) have tended to become subservient to the economy. For example, the entire educational system seems to have become driven by the job market, politicians get elected on the strength of the economy, and despite lip service to family values, executives are expected to uproot their families in service to corporate life. Goals other than material success, such as teaching, are missing from the portrait of the American Dream, as reflected in the old adage "Those who can, do; those who can't, teach" (Long 1985, p.196).

Messner and Rosenfeld's (1994) American Dream theory points to a broad cultural ethos in which the goal of monetary success is to be pursued by everyone in a mass society dominated by huge multinational corporations. As they observe: "Given the strong, relentless pressure for everyone to succeed, understood in terms of an inherently elusive monetary goal, people formulate wants and desires that are difficult, if not impossible, to satisfy within the confines of legally permissible behavior" (1994, p.77). This key feature of the American Dream helps explain corporate fraud that offers monetary success to corporate executives. Moreover, the distinctive cultural message accompanying the monetary success

lose their regulatory force. Originally, an 18th century French sociologist, Emile D. Durkheim, defined the term "anomie" as a condition where social and/or moral norms are confused, unclear, or simply not present. Durkheim felt that this lack of norms – or preaccepted limits on behavior in a society – led to deviant behavior such as individual suicide or executive fraud (Giddens 1972, p.184 – in *The Division of Labor in Society* translated by George Simpson). Later, Richard Cloward and Lloyd Olin (1960) expanded Merton's Anomie theory to include circumstances that provide the opportunity for people to acquire through illegitimate activities, such as gang activities, what they cannot achieve through

Messner and Rosenfeld (1994) observe that Merton's Anomie theory does not provide a fully comprehensive sociological explanation of crime in America. They argue that the most conspicuous limitation of Merton's theory is that it focuses exclusively on one aspect of the American social structure: inequality in access to the legitimate means for success. As a consequence, it does not explain how specific features of the broader institutional structure of society interrelate to produce the anomic pressures that are responsible for crime. Messner and Rosenfeld (1994, p.66) developed an institutional anomie theory similar to Merton's and called it the "American Dream" theory with specific reference to four social institutions – the family, the education, the polity (political system), and the economy. The institution of family bears the responsibility for the care of dependent persons and to provide emotional support for its members. The institution of education bears the responsibility for transmitting basic knowledge to new generations and to prepare youth for the demands of occupational roles. The institution of polity bears the responsibility for protecting members of society and to mobilize and distribute power to attain collective goals. Finally, the institution of economy bears the responsibility for the production and

A basic tenet of Messner and Rosenfeld's (1994) American Dream theory is that the pursuit of monetary success (i.e., the institution of economy) has come to dominate the American society, and that the non-economic institutions (i.e., the institution of education, the institution of polity, and the institution of family) have tended to become subservient to the economy. For example, the entire educational system seems to have become driven by the job market, politicians get elected on the strength of the economy, and despite lip service to family values, executives are expected to uproot their families in service to corporate life. Goals other than material success, such as teaching, are missing from the portrait of the American Dream, as reflected in the old adage "Those who can, do; those who can't, teach"

Messner and Rosenfeld's (1994) American Dream theory points to a broad cultural ethos in which the goal of monetary success is to be pursued by everyone in a mass society dominated by huge multinational corporations. As they observe: "Given the strong, relentless pressure for everyone to succeed, understood in terms of an inherently elusive monetary goal, people formulate wants and desires that are difficult, if not impossible, to satisfy within the confines of legally permissible behavior" (1994, p.77). This key feature of the American Dream helps explain corporate fraud that offers monetary success to corporate executives. Moreover, the distinctive cultural message accompanying the monetary success

accepted methods.

distribution of goods and services.

(Long 1985, p.196).

goal is to pursue the American Dream by "any means necessary." This anomic orientation of the American Dream helps explain top executives' tacit approval of corporate fraud.1

We caution against an overly simplistic interpretation of American culture. The United States is a complex and, in many respects, culturally pluralistic society. It neither contains a single, monolithic value system nor exhibits complete consensus surrounding specific value issues. We nevertheless concur with Hochschild's (1995, p.xi) that the American Dream has been, and continues to be, a "defining characteristic of American culture," a cultural ethos "against which all competitors must contend." In addition, we believe a better understanding of corporate executive fraud is possible by relating three key features of the American Dream theory (Intense emphasis on monetary success, Corporate executives exploit/disregard regulatory controls, and Corporate executives justify/rationalize fraudulent behavior) with the three variables of the Fraud Triangle concept (Pressure, Opportunity, and Rationalization).
