Private Cops on the Fraud Beat: The Limits of American Business Self-Regulation, 1895–1932
May 19, 2009
Business History Review, Vol. 83, No. 1, 2009
From the late 1890s through the 1920s, a new set of nonprofit, business-funded organizations spearheaded an American campaign against commercial duplicity. These new organizations shaped the legal terrain of fraud, built massive public-education campaigns, and created a private law-enforcement capacity to rival that of the federal government. Largely born out of a desire among business elites to fend off proposals for extensive regulatory oversight of commercial speech, the antifraud crusade grew into a social movement that was influenced by prevailing ideas about social hygiene and emerging techniques of private governance. This initiative highlighted some enduring strengths of business self-regulation, such as agility in responding to regulatory problems; it also revealed a weakness, which was the tendency to overlook deceptive marketing when practiced by firms that were members of the business establishment.
Keywords: regulation, business organizations
JEL Classification: N82, K2, L5
Date posted: May 24, 2009 ; Last revised: February 11, 2011