Published in 2009, Lords of Finance was written by professional investment manager Liaquat Ahamed. It is a revealing, non-fictional account of the events and causes of the Great Depression.
While the 1929 Great Depression is often assumed to have been caused by a series of unrelated and uncontrollable events converging, Ahamed reveals that in fact, the economic meltdown was down to specific decisions made by central bankers who also set the scene for the catastrophic events of the Second World War.
Lords of Finance follows the lives and eccentric personalities of four central bankers: Montagu Norman from the Bank of England, Emile Moreau of Banque de France, Hjalmar Schacht of the Reichsbank and Benjamin Strong of the Federal Reserve Bank of New York. The book provides memorable portraits of their lives and decisions as heads of their central banks which had undeniable effects on the course of the century.
The bankers had one common fear -inflation- which was the biggest threat to capitalism. As a way of combating the effects of the First World War, the bankers attempted a reconstruction of the market by converting the world back to the gold standard- which is strongly criticized by Ahamed. While initially, the gold standard seemed to be successful, it was soon discovered that the system was in fact very flawed and limiting due to the way the policies were designed, leading to the downward spiral of the Great Depression.
As this century faces great pressing economic issues, Lords of Finance serves as a reminder of the huge effect central bankers have on the economy, how they can often be mistaken, and the disastrous effects that can occur. This read offers extremely revealing insights into the modern day and is recommended to all interested in the history of the Great Depression and the nature of financial crises.