The Match King: Ivar Kreuger, The Financial Genius Behind A Century Of Wall Street Scandals, by Frank Partnoy
In reading this book, one is put into the uncomfortable position of being a juror in an Ayn Rand play where a capitalist is being put on trial in the early part of the Great Depression for various reasons. Is Ivar Kreuger a scapegoat for the mistakes of others or was he a fraudulent huckster who made millions off of dangerous and exotic financial instruments, some of which he had invented himself? The author, in this rather balanced and very detailed account, suggests it was a little bit of both. As someone who thinks from time to time about matters related to the stock market , I found this book to be a critique of the curious historical blindness that has seen the methods that Kreuger used gain popularity even as the man himself is (wrongly) pilloried as being a mere Ponzi scheme operator. As a result, this book reads like a Greek tragedy, where the reader knows how everything is going to end very badly for everyone involved but where one cannot help but continue all the way until the inevitable destruction of Kreuger’s reputation and family name occurs.
This book is fourteen chapters and a bit more than two hundred pages long, and it covers the life and times of one Ivar Kreuger, a complicated Swedish industrialist who sought to become one of the world’s most powerful people, moving from the scion to a Swedish match manufacturer to an industralist and financier par excellence, who before he was ruined in the disaster of the Great Depression, had parlayed his inventive financial instruments and complicated off-the-balance-sheet transactions between a baffling array of shell companies into a multiplication of wealth for himself (and others) that included the holding of sovereign debt and the attempts to manipulate the market for matches around the world. Intriguingly, his lack of interest in regulators showing scrutiny to his opaque business dealings was mirrored by an intensely lonely personal life that included a fondness for teenage girls and a strong aversion to intimacy, mirrored by the same tension between glamour and loneliness in Greta Garbo, with whom he was particularly close. Even with the inevitable death (likely through suicide) and financial ruin of his companies, the author finds him a sympathetic figure even if his innovative financial instruments caused havoc whenever they were used in order to hide complicated financial dealings from the scrutiny of complicit auditors, stubborn regulators, and blissfully unaware investors.
Ultimately, the writer comes down on the position that the titular match king does not deserve the obloquy he has suffered as a result of his fall and the resulting scandal. To be sure, he did engage in the fraudulent (if incompetent) copying of Italian bank notes, for reasons few people understand. And he was a person whose financial dealings were shady–but no more shady than that of many other people then and now. The author is quick to remind the reader, though, that what separates Ivar from the great mass of corrupt financiers is that he created real products (matches) and engaged in his financial shenanigans mainly to provide good returns on investment to investors, rather than to eat up potential profits in high fees as is common among contemporary financial middlemen. Even if Ivar Kreuger was not an honest man or a heroic one, he was a man who is morally superior to most of the people on Wall Street, many of whom would look upon Kreuger as a loathsome figure, and it is that moral superiority that gives this book much of its heft and melancholy, as it appears Kreuger was most interested in cutting a fine figure and living a high life and gaining a lasting and enduring good reputation for serving the best interests of ordinary investors as well as various nations seeking to recover from the horrors of World War I. If he went about it the wrong way, and he surely did, there is at least something worth appreciating in him, and this book does a good job at presenting an honest account of a complicated man.
 See, for example: