Pulitzer Prize, History, 2010It 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.
©2009 Liaquat Ahamed; (P)2009 Tantor
"Ahamed cannot have foreseen how timely his book would be.....Lords of Finance is highly readable - enlivened by vivid biographical detail but soundly based on the literature. That it should appear now, as history threatens to repeat itself, compounds its appeal." (Financial Times)
"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)
My interests run to psychology, popular science, history, world literature, and occasionally something fun like Jasper Fforde. It seems like the only free time I have for reading these days is when I'm in the car so I am extremely grateful for audio books. I started off reading just the contemporary stuff that I was determined not to clutter up my already stuffed bookcases with. And now audio is probably 90% of my "reading" matter.
Too many history books give short shrift to the role of finances on the course of history. This book fills in a major plot hole about what went on between the two world wars. Ahamed does a great job of giving us a play-by-play of how the major central banks attempted to respond to events, including a clear picture of how the decision making process was affected by individual personalities and legacy dogma from the past. I wish the author had interspersed more of his analysis with the main text instead of saving it for the end. Ahamed builds a strong case that the gold standard was a key factor leading to dysfunctional decisions. As far as building a case that these bankers bungled their jobs, he would do better if he could come up with decisions that would have led to a better outcome. As it is, he shows people boxed in by circumstances beyond their control. In most of the situations he goes over, it appears they made the best choice available to them, and that in itself makes for a compelling if tragic story.
In fact, I wish more time had been spent on analysis overall. An economics book targeted at the mainstream audience should at least spend more time explaining about the balance of payments, and about how the trading in government securities affects trade in the private sector. But these are relatively minor complaints.
Stephen Hoye is not my favorite narrator. He has one of those superior sounding voices that imply he knows what he's talking about. I understand some people find that reassuring. If hearing someone read a book on economics and referring to "John Maynard KEENZ" all the way through doesn't bother you, then maybe you won't mind Mr. Hoye's narration. I found the British accent annoying, as he used the same one for every British person in the story, from Churchill to Keynes. Yet the other nationalities were either very mild or nonexistent as far as accents go.
Opened my eyes the way the media should have been didn't. Not even close. Irregardless of your background/interests you cannot read this book without becoming emotional.
Spoiler alert: it wasn't the stock market crashing that caused the Great Depression. Yoiks! Talk about history repeating itself. I have no background in finance or economics but do now: after reading Sylvia Nassar's "Grand Pursuit" (good beginning and end but my interest waned in mid to last quarter) followed by LoF (preferred LoF much more) I feel entitled to an opinion on the feckless leadership between Wilson and Truman administrations. High school, college students and people I regard as literate are oblivious to the post WWI flight of gold from the Bank of New York to the Exchequer, an unbelievable racking up of bad loans to prop Britain's pound by that axis of evil Montagu Norman and Strong, may they burn forever (when you read this book I dare you to remain non-judgemental). Citizens will find this remarkable given that recent bad bit of luck in the subprimes, AG and S sleepwalking all the while despite poor B. Bourne banging the alarm. Funny, nobody went to jail in either depression. Maybe you should read this book and do your part to prevent the next humiliating repetition?
Can finance be fascinating? Yes! Both the author and narrator pulled this rabbit out of a hat. Most commendable.
Some facts were incredulous but the narrator maintained equanimity and balance. How did you muster self control? It's okay to react when people do foolish things. Let yourself go.
Can you write another book about another boring subject I know nothing about? I can't believe how interesting and dastardly people who were "looking out for us" were NOT. I'll unhesitatingly buy it.
Ahmed's book offers a lot to those interested in pre-depression economics. Unfortunately the audio version suffers from a terrible reading. I found the reader's habit of reading quotes from British characters in a generalized "British" accent irritating and his particularly poor pronunciation of French names and place names distracting.
Don't get me started.
Spitting the phrase "Keynesian Economics" with contempt simply shows your lack of understanding. Keynes was the only figure of authority who understood how the gold standard strangled economics post world war one.
A fact which this book adequately lays out the case for. More than that it shows how the knowledge of the old system hamstrung the men of authority between the wars, keeping them from solving the financial crisis of the Great Depression.
It also touches on how FDR's complete lack of understanding of the gold standard actually lead to a reinvention of economics through the second world war and beyond.
A excellent view into financial history which should be required reading for anyone attempting to understand the subject.
This is a very interesting and well written book. Basically, a very useful and fairly detailed narrative of the International Financial History of, roughly, 1919 to 1933, with a short sketch of what came afterwards. I think the author is a little too orthodox in his economics for my taste, but that did not in any way abstract from the usefulesness or enjoyment of this book for me. However, the narrator was extremely annoying with his inability to pronounce the names of some major characters in economics. The surname of the economist JM Keynes is pronounced "Kay - ns" not "Keens" as the narrator kept mispronouncing it. The surname of Walter Bagehot, whose 19th century book "Lombard Street" is considered a classic and is certainly familiar to anyone who knows the least bit about central banking (precisely the target audience of this book) is pronounced "budget" not "Bag-hot" as the narrator, incredibly, and stupidly, kept mispronouncing it. Granted, the pronunciation of these two names is not obvious, but it's not that difficult to check before starting reading. I need not even mention the catastrophic and (to anyone who understands German) fairly annoying way the narrator mispronounced German terms (of which there are quite a few peppered around the book). Sometimes it got to the point that it was impossible for German speakers to understand which German term was read! Awful, tell the man to check pronunciation the next time he does a book.
This was a very pleasurable listening experience of a fascinating and riveting economic history Europe and the United States in the period spanning the two world wars.
The audiobook is unabridged and consequently quite long at over 17 hours. It took me about a month to get through but didn't ever feel like dragging.
The narration uses a 1920's and 1930's American radio announcer voice that is perfect for this story. The humor is delivered deadpan.
The more they stay the same.
Fascinating book which reminds us that disastrous consequences often arise from best laid plans.
Greed and hubris were as much at play in the interwar period as they are today.
A great book for history buffs.
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