Seeing Like an Anti-Fraud State

They look upon fraud as a greater crime than theft, and therefore seldom fail to punish it with death, Jonathan Swift famously wrote of the fictional island of Lilliput in Gulliver's Travels. Appearing as an epigraph of Edward Balleisen's Fraud: An American History from Barnum to Madoff, it invites comparison of Lilliput with the United States, not least because it is paired with a 2007 quotation from the former Federal Reserve Chairman Alan Greenspan, who was rather more philosophical about fraud. As the world teetered on the edge of economic crisis, he wrote it off as a regrettable but inevitable part of the way human nature functions, suggesting that what successful economies do is keep it to a minimum. Looking backward, Balleisen finds greater ambivalence in the historical record, as a matter of both human psychology and American law. From the nation's founding, he observes, the country's lionization of entrepreneurial freedom has given aid and comfort to the perpetrators of duplicitous schemes. But this is not to say that they have been allowed to act with impunity. To the contrary, their creative deceptions have inspired a wide array of anti-fraud initiatives, operating at the leading edge of regulatory innovation. In chronicling these conflicting and conflicted pursuits of profit and justice over the course of two centuries of American history, Balleisen brilliantly elucidates an enduring dilemma of governance: how to promote ingenuity without undermining 'the capital of confidence upon which all progress depends.'