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Edward J. Balleisen. Fraud: An American History from Barnum to Madoff. Princeton, N.J: Princeton University Press, 2017. xiv + 496 pp. $35.00.

In 1865, P.T. Barnum observed that "there is no sort of object which men seek to attain … in which humbug is not very often an instrumentality."1 As the self-described Prince of Humbug, Barnum knew well the art of deception and its commercial value; his sales tactics often straddled the line between showmanship and fraud. Today, almost one hundred and fifty years later, Barnum's statement still rings true. Although much has changed in the way that commercial deception is policed, humbug remains an important tool for some modern American capitalists. Indeed, the American marketplace has never been nor will ever be entirely cleansed of fraud, as Edward Balleisen reports in his exciting new book Fraud: An American History from Barnum to Madoff. "No capitalist society will ever rid itself of clever, beguiling, charismatic flim-flammers, nor established firms that, in the face of new challenges, turn to deceptive marketing or dishonest accounting," Balleisen concludes (p. 383). He finds that commercial innovation and fraud have always been closely linked; new industries without established norms and standards of conduct consistently provide fertile ground for swindles and humbugs.

Fraud chronicles the history of business fraud and its regulation over the past two hundred years, beginning in the early nineteenth century. Unlike previous works that focus on particular fraudsters or incidents of fraud, Balleisen casts a wide net that draws in examples from many corners of the world of commerce, including from the sale of securities, lightning rods, and other home improvement services, appliances, and medicine. An array of "capsule stories" illustrate the many varieties of business fraud and range of antifraud policing efforts over the past two centuries, as well as the similarities in approaches to fighting fraud across different domains of business within each era (p. 12). Although this method does not yield "clean plotlines" or deep explorations of central figures and events, it serves Balleisen's purpose well, which is to find the enduring patterns and "key inflection points" in the fight against business fraud, in addition to explaining the value of this history for [End Page 217] present-day policymaking (p. 12). Without lingering for long on the question of how we define "fraud," Balleisen provides historians and policymakers with a rich history of the machinery designed to stop and prevent it.

Aside from the first two chapters, which offer an introduction and overview of the world of fraud, the remainder of the book explores the history of fraud policing in four parts. Each part corresponds to a different "phase" in the history of antifraud regulation: "A Nineteenth-Century World of Caveat Emptor (1810s to 1880s)," "Professionalization, Moralism, and the Elite Assault on Deception (1860s to 1930s)," "The Call for Investor and Consumer Protection (1930s to 1970s)," and "The Market Strikes Back (1970s to 2010s)." The first three phases chart a gradual shift away from the nineteenth century ethos of caveat emptor, "buyer beware," toward the mid-twentieth century mantra of caveat venditor, "seller beware." Over this period, reformers from within the state, the business community, and the "quasi-public domains between the two" fashioned new institutions and initiatives that became part of the "expanding web of antifraud regulation" that appeared between the 1860s and the 1970s (pp. 6–7). The final part then describes the "partial resurgence" of the caveat emptor ethos beginning in the mid-1970s, fueled by criticisms of excessive regulation from across the political spectrum and a "resurgent American antistatism" (p. 360).

Within each part, most chapters proceed thematically, rather than chronologically. Part II chapter three, for example, maps the legal landscape of antifraud laws in the period from the end of the War of 1812 through Reconstruction, which corresponds to the lifespan of P. T. Barnum. The next chapter then describes private strategies for preventing fraud deployed during the same period, including the creation of new institutions for the collection and dissemination of information about commercial trickery for the business community and general public. The resulting chronology of fraud...

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Additional Information

ISSN
1080-6628
Print ISSN
0048-7511
Pages
pp. 217-222
Launched on MUSE
2018-06-22
Open Access
No
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