Whenever buyers and sellers get together , opportunities to fleece the other guy arise . The history of markets is , in part , the history of lying , cheating and stealing ― and of the effort down the years to fight commercial crime . In fact , the evolution of the modern economy owes more than you might think to these outlaws . That ’ s the theme of “ Forging Capitalism : Rogues , Swindlers , Frauds , and the Rise of Modern Finance ” by Ian Klaus . It ’ s a history of financial crimes in the 19 th and early 20 th centuries that traces a recurring sequence : new markets , new ways to cheat , new ways to transact and secure trust . As Klaus says , criminals helped build modern capitalism . And what a cast of characters . Thomas Cochrane is my own favorite . ( This is partly because he was the model for Jack Aubrey in Patrick O ’ Brian ’ s “ Master and Commander ” novels , which I ’ ve been reading and rereading for decades . Presumably Klaus isn ’ t a fan : He doesn ’ t note the connection . ) Cochrane was an aristocrat and naval hero . At the height of his fame in 1814 he was put on trial for fraud . An associate had spread false rumors of Napoleon ’ s death , driving up the price of British government debt , and allowing Cochrane to avoid heavy losses on his investments . Cochrane complained ( with good reason , in fact ) that the trial was rigged , but he was found guilty and sent to prison . The story is fascinating in its own right , and the book points to its larger meaning . Cochrane , in a way , was convicted of conduct unbecoming a man of his position . Playing the markets , let alone cheating , was something a man of his status wasn ’ t supposed to do . Trust resided in social standing . As the turbulent century went on , capitalism moved its frontier outward in every sense : It found new opportunities overseas ; financial innovation accelerated ; and buyers and sellers were ever more likely to be strangers , operating at a distance through intermediaries . These new kinds of transaction required new ways of securing trust . Social status diminished as a guarantee of good faith . In its place came , first , reputation ( based on an established record of honest dealing ) then verification ( based on public and private records that vouched for the parties ’ honesty ) . Successive scams and scandals pushed this evolution of trust along . Gregor MacGregor and the mythical South American colony of Poyais ( “ the quintessential fraud of Britain ’ s first modern investment bubble , ” Klaus calls it ) ; Beaumont Smith and an exchequer bill forging operation of remarkable scope and duration ; Walter Watts , insurance clerk , theatrical entrepreneur and fraudster ; Harry Marks , journalist , newspaper proprietor and puffer of worthless stocks . On and on , these notorious figures altered the way the public thought about commercial trust , and spurred the changes that enabled the public to keep on trusting nonetheless . The stories are absorbing and the larger theme is important : “ Forging Capitalism ” is a fine book and I recommend it . But I have a couple of criticisms . The project presumably began as an academic dissertation , and especially at the start , before Klaus starts telling the stories , the academic gravity is crushing . Trust , to be simple with our definition , is an expectation of behavior built upon norms and cultural habits . It is often dependent upon a shared set of ethics or values . It is also a process orchestrated through communities and institutions . In this sense , it is a cultural event and thus a historical phenomenon . No doubt , but after a first paragraph like that you aren ’ t expecting a page - turner . Trust me , it gets better . When he applies himself , Klaus can write . Describing the messenger who brought the false news of Napoleon ’ s death , he says : Removed from the dark of the street , the man could be seen by the light of two candles . He looked , a witness would later testify , “ like a stranger of some importance . ” A German sealskin cap , festooned with gold fringes , covered his head . A gray coat covered his red uniform , upon which hung a star . .. Neighbors and residents of the inn stirred and peered in as the visitor penned a note . Tell me more . My other objection is to the book ’ s repeated suggestion that Adam Smith and other classical proponents of market economics naively underestimated the human propensity to deceive and over - credited the market ’ s ability to promote good behavior . Klaus doesn ’ t examine their claims at length or directly , but often says things such as : The sociability in which Adam Smith had placed his hopes for harnessing self - interest was not a sufficient safeguard in the sometimes criminal capitalism of the ruthless free market . Of course it wasn ’ t . Smith didn ’ t believe that the market ’ s civilizing tendencies , together with humans ’ instinct for cooperation , were a sufficient safeguard against fraud or breach of contract or other commercial wrongs . He was nothing if not realistic about human nature . And by the way , many of the subtle adaptations to the shifting risk of fraud that Klaus describes were private undertakings , not government measures . Far from being surprised by them , Smith would have expected their development . Nonetheless , Klaus is right : Give the markets ’ ubiquitous and ingenious criminals their due . They helped build modern capitalism , and they aren ’ t going away . Just ask Bernie Madoff . By Mohamed El - Erian   Clive Crook is a Bloomberg View columnist and a member of the Bloomberg View editorial board . A former chief Washington commentator of the Financial Times , he previously worked at the Economist and as a senior editor at the Atlantic . ― Ed . ( Bloomberg ) [ 우리 아이 영어 글쓰기 , 어떻게 교육 하 나요 ] 	 더 많 은 기사 보 러 가 기 → [ 코리아 헤럴드 홈페이지 ] [ 트위터 ] [ 페이스북 ] 	 구독 신청 1588 - 0533 	 <ⓒ KoreaHerald ( www . koreaherald . com ) 무단 전재 및 재 배포 금지 >