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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 made 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 Émile 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. For a brief period in the mid-1920s, they appeared to have succeeded. The world's currencies were stabilized, and capital began flowing freely across the globe. But beneath the veneer of boomtown prosperity, cracks started to appear in the financial system. The gold standard that all had believed would provide an umbrella of stability proved to be a straitjacket, and the world economy began that terrible downward spiral known as the Great Depression.
As yet another period of economic turmoil makes headlines today, the Great Depression and the year 1929 remain the benchmark for true financial mayhem. Offering a new understanding of the global nature of financial crises, Lords of Finance is a reminder of the enormous impact that the decisions of central bankers can have, of their fallibility, and of the terrible human consequences that can result when they are wrong.
"Erudite, entertaining macroeconomic history of the lead-up to the Great Depression as seen through the careers of the West's principal bankers....Spellbinding, insightful and, perhaps most important, timely." ( Kirkus Reviews)
Customer ReviewsMost Helpful
By Toru on 11-27-09
interesting insight into interwar period!
longish, but engaging historical narrative! related to you through mini-biographies of the main players of the time. easy to understand too, although due to its approach to the story (economics/finance), you might have to rewind sometimes to get the more technical aspects of his sweeping narrative. but highly recommended if you're looking to learn a thing or two about the Great Depression and some perspective on its connections to our current global economic crisis.
18 of 18 people found this review helpful
By IRP on 02-20-10
Extremely Interesting Book
As has been discussed in prior reviews, this book focuses on the Great Depression and the events leading up to it beginning with the pre World War One period. While any of book of this sort will focus on economics, this one portrays the events through the biographies of the four central bankers of England (Montagu Norman), France (Emile Moreau), US (Benajmin Strong)and Germany (Hjalmar Schact) as well as other individuals who participated in the spectacle (John Maynard Keynes). The author does a great job in sketching portraits of each man. The book is extremely well written and read and merits the acclaim that it has received (Financial Times Award among others). What I found to be extremely interesting is the eiplogue in which the author takes the thesis of the book and tries to compare and contrast it to more recent events (such as the financial crisis in Mexico in the early 1990's followed by the Russian and Emerging Markets fiasco in the late 1990's and even the financial crisis in 2008) and how the modern era central bankers took affirmative action to avoid a replay of the Great Depression.
15 of 15 people found this review helpful