- List of Figures
- List of Tables
- Global Finance And Its Institutional Spaces
- Politics And Financial Markets
- Finance And Institutional Investors
- Business Groups And Financial Markets As Emergent Phenomena
- Central Banking And The Triumph Of Technical Rationality
- What is a financial market? Global markets as microinstitutional and post-traditional social forms
- Auctions And Finance
- Interactions And Decisions In Trading
- Traders And Market Morality
- The Material Sociology Of Arbitrage
- Seeing Through The Eyes Of Others: Dissonance Within And Across Trading Rooms
- Market Efficiency: A Sociological Perspective
- Financial Analysts
- Rating Agencies
- Accounting And Finance
- The International Monetary Regime And Domestic Political Economy: The Origin Of The Global Financial Crisis
- A Long Strange Trip: The State And Mortgage Securitization, 1968–2010
- Dead Pledges: Mortgaging Time And Space
- Financial Crises As Symbols And Rituals
- The Sociology Of Financial Fraud
- The Disunity Of Finance: Alternative Practices To Western Finance
- Islamic Banking And Finance: Alternative Or Façade?
- Geographies Of Finance: The State-Enterprise Clusters Of China
- The Financialization Of Art
- Historical Sociology Of Modern Finance
- Gender And Finance
- The Role Of Confidence In Finance
- Finance In Modern Economic Thought
- Financial Automation, Past, Present, And Future
Abstract and Keywords
The sociology of fraud is inseparable from the sociology of trust and confidence. Indeed, the history of finance tells us that confidence is the common underpinning of both ‘legitimate’ capitalism and fraudulent activity. Reviewing the nearly 300 years that have elapsed between the first large-scale financial fraud in history — the British South Sea Bubble of 1720 — and the contemporary financial crisis, we can appreciate how one historian concluded that ‘At its core, capitalism was little more than a confidence game’, a known fraud tolerated because ‘as long as confidence flourished, even the most far-fetched speculations could get off the ground, [and] wealth would increase’. In this system, fraud and faith flourish together. As a result, the lines between legal and illegal acts, criminals and honest dealers, become dangerously blurred, raising troubling questions about the foundations of capitalism itself. In contemporary capitalist societies, this inevitably leads to further questions about social structure, from institutions, through interactions, and the very nature of identity itself. This article deals with the role and place of financial frauds in times of crisis and beyond. It begins with a definition of financial fraud. It then discusses the three facets of fraud and the future of fraud.
Brooke Harrington is Associate Professor of Economic Sociology at the Copenhagen Business School in Denmark. Her books include Pop Finance: Investment Clubs and the New Investor Populism (2008), as well as the edited volume Deception: From Ancient Empires to Internet Dating (2009). After receiving a doctorate in Sociology from Harvard University, Harrington earned research prizes and grants from organizations such as the National Science Foundation, the Russell Sage Foundation, the Alexander von Humboldt Foundation, the American Sociological Association, and the Academy of Management. Her current project is a qualitative study of the wealth management profession, offshore banking, and cross-national patterns of inheritance and inequality.
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