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Journalism of Courage
Only occasionally does literature throw up great swindlers,like Anthony Trollope8217;s Augustus Melmotte. Real rogues are far more common. A new biography of Ivar Kreuger,who perpetrated perhaps the biggest financial scandal of the 20th century,provides a fascinating insight into how high society falls prey to such colourful characters.
Kreuger8217;s story is uncannily relevant today. When the dapper,42-year-old Swede sailed aboard a luxury liner into New York in 1922,he could sense the mood of euphoria beginning to grip Wall Street. But he didn8217;t just take advantage of it like a fly-by-night Charles Ponzi. He helped define his era,accompanied by friends such as Greta Garbo and Herbert Hoover.
The author can at times appear gushingly over-impressed by his subject. But in some ways he is setting the record straight. When Kreuger8217;s suicide was reported in 1932,and he was discovered to have forged holdings of Italian treasury bills,his empire collapsed and he was vilified around the world. It knocked the last shred of confidence out of the Depression era. Yet some of the businesses he founded or invested in,such as Swedish Match and Ericsson,are still standing,and his American investors could have recouped some of their losses if they had held out long enough.
Mr Partnoy is less convinced by the claims of Kreuger8217;s long-standing champions in Sweden that he did not take his own life but was murdered. In defence of Kreuger,though,he makes a point worth remembering as people seek villains to blame for today8217;s financial mayhem. There is always a fine line between sharp business practices and being ethical. In his 8220;alegal8221; pursuit of profit,Kreuger was egged on by his directors,his investment bankers,his auditors and,of course,his investors. When times were good,they turned a blind eye to his foibles. When they wanted someone to blame,they turned on him. But there was and there usually is plenty of blame to go round.
The Economist Newspaper Limited 2009
