The New York Times
Lords of Finance: The Bankers Who Broke the Worldby Liaquat Ahamed
It Is Commonly Believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person's or government's control. In fact, as Liaquat Ahamed reveals, it was the decisions taken by a small number of central bankers that were the primary cause of the economic meltdown, the effects of which set the stage for World War II and… See more details below
It Is Commonly Believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person's or government's control. In fact, as Liaquat Ahamed reveals, it was the decisions taken by a small number of central bankers that were the primary cause of the economic meltdown, the effects of which set the stage for World War II and reverberated for decades. As yet another period of economic turmoil makes headlines today, Lords of Finance offers a new understanding of the global nature of financial crisis. It is a potent reminder of the enormous impact that the decisions of central bankers can have, their fallibility, and the terrible human consequences that can result when they are wrong.
The New York Times
If you think today's economy is scary, check out the Jazz Age horrors chronicled in this financial history of the interwar years and the central bankers who blighted them. Ahamed, an investment manager, surveys the economic upheavals of the 1920s and 1930s, when crushing war debts and reparations from WWI sparked hyperinflation in Germany and a host of lesser eruptions, all of it climaxing in the American stock market crash and the Great Depression. He tells the story through the central bank chiefs of Britain, France, Germany and the United States as they confront unprecedented crises while "shackled" by the "dead hand" of the gold standard, the era's reigning financial orthodoxy (economist John Maynard Keynes, foe of gold and apostle of economic activism, is the book's hero). The author injects unnecessary commentary about the bankers' neuroses and marital difficulties into his coverage of interest rate and currency fluctuations (New York Federal Reserve head Benjamin Strong, he notes, possessed a "large nose that spoke of ruthlessness"). Fortunately, his protagonists' high-wire efforts to stave off national bankruptcies furnish Ahamed with plenty of drama to highlight his engrossing analysis of the complexities of monetary policy. Photos. (Jan.)Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
In this historical study, Ahamed, a professional money manager, sums up the causes of the Great Depression as a series of economic policy blunders that could have been avoided. He cites as causal factors the inflationary financing of World War I by printing money, the insurmountable war debts of Germany and the Allies, Germany's plunge into hyperinflation, and the return of most currencies to the gold standard at excessive and deflationary prewar rates. For example, he explains that when the U.S. stock market bubble burst in 1929 and economic activity collapsed, the central banks were restrained in stimulating the economy for fear of losing their gold reserves. In an epilog, Ahamed draws parallels between the crises of the Great Depression and those in recent times. He keeps his history interesting by highlighting the personalities of the heads of the major central banks, and he employs the economist John Maynard Keynes as a one-man Greek chorus critiquing the bankers' actions. This erudite and exceedingly well-written tale of financial chaos in the 1920s and 1930s is both timely and instructive for today's economic climate. Highly recommended for all academic and most public libraries.
- Penguin Publishing Group
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- Product dimensions:
- 5.50(w) x 8.30(h) x 1.30(d)
- Age Range:
- 18 Years
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