The Economics of Innocent Fraud: Truth For Our Time

Drawing on a lifetime of experience in government and the private sector during the New Deal, World War II, and beyond, John Kenneth Galbraith examines the gap between economic reality and what he terms "conventional wisdom." He argues that the private sector has gained unprecedented control over the public sector through what he calls "contrived nonsense" or fraud. Galbraith focuses on the modern corporation, where actual power has shifted from shareholders and board members to management, despite the maintained pretense of shareholder authority. This management power extends into government policy, particularly affecting military policy, environmental regulation, and taxation. Galbraith explores how this concentration of corporate influence operates as a form of innocent fraud—accepted by participants despite its fundamental misrepresentation of how decisions are actually made. The book addresses how these dynamics have affected the economy, government effectiveness, and the business world itself. Galbraith's analysis is relevant both to electoral politics and to longer-term structural concerns about American institutions.