Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance

Are the current excesses of risk management in capital endeavors unique to our time? Or is there historical evidence that capitalism inherently creates risks that must be managed and thus creates opportunities for fraud? This book traces the history of capitalism and, humorously, the many political and financial cons perpetrated upon an unsuspecting and generally trusting public. Not having initially read the blurbs, I was surprised to find that this book is a history rather than a philosophical inquiry. It traces government interventions in the market with a series of laws and prohibitions.

The author’s thesis is that for capitalism to work well for the greater good (larger society), it must be built on a foundation of trust to expedite exchanges. Thus, confidence men can always defraud when the trust is high and the risks are lowered. Or as the book quotes Nathan Rothschild, “When a man lends his money, he wants to be safe.” Despite the humor in the stories, the book is rather dry and suited to a reader who can follow the many side stories and unconnected events. This being said, both traders and the general public could benefit from understanding the inherent flaws of capitalism.