Fraud: An American History from Barnum to Madoff

The United States has always proved an inviting home for boosters, sharp dealers, and outright swindlers. Worship of entrepreneurial freedom has complicated the task of distinguishing aggressive salesmanship from unacceptable deceit, especially on the frontiers of innovation. At the same time, competitive pressures have often nudged respectable firms to embrace deception. As a result, fraud has been a key feature of American business since its beginnings. In this sweeping narrative, Edward Balleisen traces the history of fraud in America―and the evolving efforts to combat it―from the age of P. T. Barnum through the eras of Charles Ponzi and Bernie Madoff.

Starting with an early nineteenth-century American legal world of "buyer beware," this unprecedented account describes the slow, piecemeal construction of modern regulatory institutions to protect consumers and investors, from the Gilded Age through the New Deal and the Great Society. It concludes with the more recent era of deregulation, which has brought with it a spate of costly frauds, including the savings and loan crisis, corporate accounting scandals, and the recent mortgage-marketing debacle.

By tracing how Americans have struggled to foster a vibrant economy without enabling a corrosive level of fraud, this book reminds us that American capitalism rests on an uneasy foundation of social trust.

"An ambitious exploration of two centuries' worth of swindles, bogus stock schemes and corporate crime. [Balleisen’s] keen insights and the breadth of his knowledge keep the reader engaged, and he introduces plenty of shady characters and ingenious fraudulent schemes to boot."---Dean Jobb, Chicago Review of Books

"Balleisen provides a thoughtful, sweeping examination of fraudulent business activities and the often delayed responses to thwart it. He makes extensive use of newspapers and magazines and a number of institutional archives, such as those of the Better Business Bureau and the National Vigilance Committee, to depict in rich detail numerous fraudulent activities and how people responded.", Choice

"In the end, capitalism is always a confidence game, so the problem of fraud is always with us. But the occurrence, perception, and regulation of fraud has a history, and Balleisen has now written the definitive account of it. A deeply researched and beautifully crafted book that follows the shape-shifting problem of deceit across the centuries, Fraud is nothing short of a new history of American capitalism."―Jon Levy, University of Chicago

"Balleisen casts a gimlet eye on the passing parade of hucksters and charlatans, peppering a narrative long on theory with juicy asides that build toward a comprehensive catalog of ‘Old Swindles in New Jargon'. . . . Ranging among the disciplines of history, economics, and psychology, Balleisen constructs a sturdy narrative of the many ways in which we have fallen prey to the swindler, and continue to do so, as well as of how American society and its institutions have tried to build protections against the con. But these protections eventually run up against accusations of violating ‘longstanding principles of due process,' since the bigger the con, the more lawyers arrayed behind it.", Kirkus

"A huge achievement. This will be the authoritative history of fraud in the United States for many years to come. Edward Balleisen takes us on a fascinating and entertaining tour of the many ways that swindlers have consistently shadowed America's proudest innovations, sometimes even outdoing the originals for ingenuity and impact."―Walter A. Friedman, Harvard Business School

"A readable--and enjoyable--account of how fraud as variously defined has shaped the very idea of free enterprise in America."---Richard A Booth, Regulation

"Often vivid and always thoughtful, this is a very important and impressive work by a rigorous, venturesome historian at the top of his game. When so much public debate about regulation is polemical and hyperbolic, Edward Balleisen has made a major contribution by writing a book that thoroughly, comprehensively, even-handedly, and engagingly examines the history of American fraud and its regulation from the early nineteenth century to today."―Daniel R. Ernst, Georgetown University Law Center

"Impressive. . . . Serious, intelligent, and rewarding. Although it has a sophistication that will satisfy specialists, it is also well written (the two do not always go together), which is to say that it will be accessible to educated non-specialists. Beach reading it is not, but anyone with an interest in business fraud, regulatory policy, business-state relations, or the seamier side of capitalism will find the time spent learning from Balleisen worth the effort invested."---Katherine Epstein, American Interest

"[A] dense but informative book that should become standard reading for anyone interested in understanding the strengths and shortcomings of public and private American regulatory mechanisms that target duplicity in the marketplace."---Bart J. Elmore, Journal of Southern History

"The confidence scam, of course, is as old as American capitalism. In a new book, Fraud: An American History from Barnum to Madoff, the Duke University professor Edward J. Balleisen argues that fraud has been a central feature of our freewheeling economy from the start, making it hard to tell scams from legitimate businesses and hard to tell aggressive sales tactics from outright deception--especially in innovative industries."---Carina Chocano, New York Times Magazine