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Most people think the Great Depression that began in 1929 was the result of events beyond the control of individuals and governments. But Liaquat Ahamed shows that its main cause was the power concentrated in the hands of a few leading central bankers. Its consequences lasted for decades and laid the groundwork for the Second World War. It is a period that has inspired many authors. Liaquat Ahamed’s Lords of Finance gives readers a fresh perspective on that crisis and reminds us how enormous the impact of a few bankers’ decisions can be, while showing the terrible consequences such decisions can have for all of humanity.
Lords of Finance PDF – Liaquat Ahamed
Who Is the Author of Lords of Finance?
Liaquat Ahamed is an investment manager who has held senior roles at major institutions, including the World Bank in Washington, D.C., and served as CEO of Fischer Francis Trees & Watts. He currently advises several hedge funds and is a director of Aspen Insurance. He is also a member of the board of trustees of the Brookings Institution.
Besides his investment career, Liaquat Ahamed is a respected author who has written on finance, most notably Lords of Finance – the book that won the Pulitzer Prize in 2010.
What Is Lords of Finance About?
Lords of Finance covers almost every major historical event across more than 20 years, starting with the assassination of the heir to the Austro-Hungarian throne, which directly triggered the First World War, and running to the closing stages of the global economic and financial crisis of 1929–1933. Nearly 700 pages long, the book covers almost all the key events and figures of those years. Yet with his intelligence and sharp prose, the author keeps readers hooked from one historical episode to the next. Through this book, the root causes of the Great Depression of 1929 were laid bare for the first time.
Lords of Finance builds on earlier research by well-known economists such as Milton Friedman, Anna Schwartz, Charles Kindleberger, Barry Eichengreen and Peter Temin. Unlike earlier books on the causes of the 1929 crisis, Liaquat Ahamed’s has been warmly received by readers for its historical accuracy combined with real literary flair. The book also retraces the tragic story of the four leading bankers of the time:
- Montagu Norman – long-serving head of the Bank of England
- Émile Moreau – head of the Banque de France
- Hjalmar Schacht – head of Germany’s Reichsbank
- Benjamin Strong – head of the Federal Reserve Bank of New York
As one review put it: “It is the first in-depth study of this group of central bank governors, and it not only sparks readers’ excitement and curiosity but is also remarkably timely”.
The 2008–2009 crisis has been compared with the Great Depression of 1929–1933; there are many similarities but also differences. The 1929 downturn devastated the world economy. As Liaquat Ahamed writes: “During those three years of crisis, real GDP in the major economies fell by 25%, and a quarter of working-age men were unemployed… The Depression brought unprecedented hardship all over the world, from the vast prairies of Canada to the crowded, cramped cities of Asia”.
The author identifies two main causes of the Great Depression. The first was the poorly conceived restoration of the gold standard in the 1920s. The second was the huge burden of government debt, including the war reparations imposed on Germany – both consequences of the First World War.
The 1929 crisis was entirely different from any major economic upheaval before it and is seen as a major turning point in world financial history. Lords of Finance reads like a gripping story about little-known historical events that had a huge impact on the world economy.
Our Thoughts on Lords of Finance by Liaquat Ahamed
Lords of Finance has been likened to a captivating and beautifully drawn historical canvas. It reveals what went on behind the scenes of the world economy and clearly sets out the main causes of the Great Depression of 1929 – one of the most shattering events of the 20th century. The author concludes that the main cause was the mistaken decisions of a few leading bankers of the time, which set off a chain of terrible consequences for human history.
The subject may sound grand, steeped in history and rather long, which may put some people off. But the book is quite easy to read and does not dwell on dry technical knowledge. The author’s engaging style, with insightful and often witty commentary throughout, is a big plus. Lords of Finance is a very good and deeply meaningful book; if you have not read it yet, pick it up now. It will give you a great deal of financial knowledge that not everyone has.
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