nthposition online magazine

The economics of innocent fraud


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Samuel Beckett's last published writing - Stirrings Still - achieved a brevity that seemed, in retrospect, a stunning (and existentially chilling) character note, as if his whole writing career had aimed at eventual silence. Beside such puritan prosody, even the succinct wit of his earlier novels seemed capriciously prolix.

The intimation of silence hangs over JK Galbraith's latest book too; but where Beckett's brevity is consciously arcane, Galbraith's has the august ring of truism revealed as truth; you may, like me, be suspicious of any book whose title includes the word truth, but after reading the book, I wished he'd prefaced the subtitle with an indefinite article.

Chomsky has recently spoken of the denial of moral truism as a gambit in contemporary political discourse, an elision of truth for the profoundly insincere purposes of realpolitik. Galbraith, it seems, has taken up the ethical baton Chomsky proffered, in a volume so slim it hardly seems to have space for theory or critique; and in a little over 70 pages, he points his pen at most of the pillars of current economics without ever quite denouncing anything - the book is either a caveat so tentative no one will heed it, or a poison so subtle only a small bottle was needed.

Stylistically, reading The Economics Of Innocent Fraud is like reading HL Mencken in memo mode. Although the patina of 19th-century sensibility and poise suggests a reassuringly cultured, and culturally accessible work, this a difficult book. Sentences are regularly divested of their copular verbs, and morphed into pithy recipes for rectitude, almost haikus ('Thus the fraud. Correction awaits.'). Occasionally the language becomes so compressed ('Brutal but determined action. A verbal fraud somewhat so recognized.') that its Victorian timbre could be the ring of an entirely foreign - if irritatingly familiar - tongue.

Perhaps this elaborate shorthand is an attempt to soften the blow of Galbraith's broad denunciation of the market system, the reality of the world of work, corporate bureaucracy posing as efficiency, and the frightening rise of the corporate managing class. Had a congenital dissident written this book, or another like it, its contents could be dismissed easily enough - they would say that, wouldn't they? - but here is the Boaz of economics telling us that the whole thing, from the very name of the system outwards, is quietly spurious.

Or is he? The Economics Of Innocent Fraud is rather a book depending on who reads it. For those ideologically or emotionally opposed to modern forms of capitalism in general, and in particular the neo-liberal project for 'global' markets, it is a devastating exposé of the fraudulent mechanics of a fraudulent system, all the more effective coming from the pen of a perceived Methusaleh of monetarism (perceived; Galbraith is no Friedman, and given the choice between Hayek and Keynes, he might surprise you).

For the scions and mavens of the brave new world currently tottering towards utopia, the book is an instructive, and augustly amusing, critique of the theology of the pocket, but its supposed iconoclasm is rhetorical - it has no teleology. And since in many ways it is merely the iconostasis of the marketeer's basilica which Galbraith turns his patrician sneer on, no structural damage is anticipated (at least not by this readership).

Stiglitz has recently written (in The Roaring Nineties) about the illusions of globalisation, and the catastrophic effect on ordinary people of an economic system driven more by conviction than arithmetic. His tone is more contrite than Galbraith's, a nostra culpa on behalf of the global chimera's haughty architects. Overall, he gives the impression (an impression which lames his otherwise comprehensive critique) that well-intentioned people made a genuine mistake.

This means, ultimately, that the movers and shakers are guilty of little more than credulity; mistaking a theology for an algorithm. We could almost feel sorry for such clever people so easily gulled. Galbraith's sly litany locates the credulous elsewhere; the innocent fraud of the title is cumulatively ironic precisely because the system's main beneficiaries have been aware of its specious logic right from the beginning. But Galbraith's moral opprobrium is occluded, for good or for ill, by his curious exercise in literary camouflage.

Reading that the Federal Reserve has no effect on the economy whatsoever, or that financial advice is always wrong, or that managers have stolen corporations from their actual owners, I found myself doing cartoon double-takes: did he really say that? Why was it so little of a shock?

The answer, I suspect, lies in Galbraith being unable, ultimately, to completely stand outside the club of which he has been a distinguished member for so long. Even though he knows that its actions are exploitative to the point of lethal, he cannot bring himself to condemn outright the system he so elegantly critics to the point of literary (but only literary) extinction.