This is a very readable 12-page explanation of the concept of ‘control fraud’ and its effect on the economy. It was written by William Black in 2005 and its full title is: When Fragile becomes Friable: Endemic Control Fraud as a Cause of Economic
Stagnation and Collapse.
The original is here, I have also posted it to Scribd for readability and easier dissemination:
A quote from the document:
Neo-classical economics’ understanding of fraud is so weak that its policy prescriptions,
if adopted wholly, produce strongly criminogenic environments that cause waves of
control fraud. Neo-classical policies simultaneously make control fraud easier and more
lucrative, dramatically reduce the risk of detection and prosecution by maximizing
“systems capacity” problems, and encourage crime by making it easier for fraudsters to
“neutralize” the social and psychological constraints against deceit and fraud. Thus the
paradox: neo-classical economic triumphs produce tragedy.
William Black does not say so, but might the failure of neo-classical economics to recognise fraud as a problem be due to the fact that neo-classical economics is a fraud itself, having as its purpose the enriching of a few while everyone and everything else be damned?