Rothschilds, Railroads, & Ruin | Liaquat Ahamed on “1873” (New Book!)
Episode publishedPodcast: Monetary Matters with Jack Far...Monetary Matters with Jack Farley
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I am so glad today we have a very special guest. One of my favorite authors of all time, Li Akwat Ahmed, who's the author of the new book 1873, the Rothschilds, the first great depression, and the making of the modern world. Li Akwat, welcome to monetary matters.
Thank you, Jack, and thank you for having me.
I want to ask you about 1873, why it's so important. What drew you to this year?
I had written a book about the lead up to 1929 and the Great Depression, and that focused very much on the conduct of monetary policy by the four central bankers. And I was looking around for another financial crisis. I'm I'm actually not a misanthrope, but I do I do like writing about financial crises because as an economic historian, they're really quite dramatic and history speeds up, but lots of things happen. And 1873 really piqued my interest because it was both a giant financial crisis or sequence of financial crises in three different financial centers. But superimposed upon it was a c
Yeah. Your book, Lords of Finance, '19 about the nineteen twenties and nineteen thirties, In my opinion, the greatest financial history history book in in in my opinion. Oh,
thank you.
Tell us what was the monetary misstep coming out into 1873.
Okay. For fifty years, the world had relied on a combination of gold and silver as the foundation for the Mumtree system. And we'd had periods of major gold discoveries and we'd had periods of major silver discoveries. And it had proved, the system had proved to be really quite resilient, that when there was a lot of silver, that was absorbed by central banks, And when there was a lot of gold, that was also absorbed by central banks. So the monetary base, if you like, which depended on precious metals, was really quite stable and grew quite systematically. And at the heart of this were two cou
So Bismarck, the head of Germany, won a war against France and wanted to penalize France, so it moved off of silver. Why did that cause a contraction in liquidity? And also what years is it this is before 1873 or exactly 1873?
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