James Livingston makes the case over at Politics and Letters (image from Wikimedia Commons):
In the history of drama, and that includes melodrama, there’s a difference between the Fool and the Charlatan. The Fool is motivated and animated by irony doubled unto absurdity. He’s typically empowered by the King, or by the local authorities, as diversion from the real action, as comic relief—as the man whose utterance won’t make sense to the actors on stage until the play is concluded and just about everybody is dead.
The audience is differently empowered, because it’s always in on the joke of the Fool’s mistaken identity—we get the disguise, the dissembling., from the very beginning of his act. We know this Fool is not the man he pretends to be, and, more significantly, we know him as our informant on stage, on screen, in the space where we can be only spectators, and he plays this role for us no matter how devoted he is to the cause of the King or the local authorities. So he turns irony and absurdity into information for the audience long before the dramatic action is over.
The Charlatan is the figure who is merely absurd, or simply evil, because he skips the stage of irony—because, unlike the Fool, he doesn’t know that the power to which he’s indentured himself, and this includes the effect of his own utterance, is itself divisible. The difference I’m trying to describe here is the difference between Edgar and Edmund in “King Lear.” The audience knows the Charlatan lacks either conviction or evidence, and he may know this as well, but, unlike the Fool, he doesn’t care: he’s the pawn who would be king. Like Hamlet, who only plays the Fool, Iago is either the exception to or the epitome of these rules (and that’s why these two remain the formative characters of modern literature and 20th-century film).
Niall Ferguson is a Charlatan in these terms.