With penetrating insights for today, this vital history of the world economic collapse of the late 1920s offers unforgettable portraits of the four men whose personal and professional actions as heads of their respective central banks changed the course of the twentieth century
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.
In Lords of Finance, we meet the neurotic and enigmatic Montagu Norman of the Bank of England, the xenophobic and suspicious Emile Moreau of the Banque de France, the arrogant yet brilliant Hjalmar Schacht of the Reichsbank, and Benjamin Strong of the Federal Reserve Bank of New York, whose facade of energy and drive masked a deeply wounded and overburdened man. After the First World War, these central bankers attempted to reconstruct the world of international finance. Despite their differences, they were united by a common fear--that the greatest threat to capitalism was inflation-- and by a common vision that the solution was to turn back the clock and return the world to the gold standard.
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 2008 Reed Business Information.
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January 21, 2009
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