Extract

Edward J. Balleisen’s book explores a three-part question: “How [did] Americans define fraud, how much [did] they worry about it, and how [did] they structure institutional responses to it?” (4). What Balleisen has achieved is the most comprehensive historical treatment to date of the ways that business people in the U.S. have hoodwinked their unsuspecting customers, investors, suppliers, and creditors, and the responses that the frauds have engendered in the business, regulatory, legal, and non-governmental sectors. The book analyzes the impact of new regulations as well as the debates and arguments that surrounded them. In its thoroughness and analytical rigor, Fraud: An American History from Barnum to Madoff is destined to become one of the authoritative texts on the subject.

Surprisingly, the vast majority of frauds belong to only a few well-worn categories. Among the most enduring scams are pump and dump, bait and switch, and the Ponzi (or pyramid) scheme. Balleisen provides ample case studies of these and other classic frauds, and he explains how they have evolved with changing technologies, increased market scale, business innovations, and shifts in social norms.

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