1873: The Rothschilds, the First Great Depression, and the Making of the Modern World

I had heard about this book on a Plain English podcast episode. I had read Liaquat Ahmed's Lords of Finance at the end of last year about the central bankers leading up to the Great Depression and thought the podcast conversation was interesting comparing the railroad and bond boom of the late 1860s and early 1870s to the current AI boom.

The book goes over how the financial crash of 1873 was the first truly global financial crisis hitting the United States, France, Britain, Germany and others. It also amazes me how we've never seemed to learn from history. The causes as Liaquat goes into, bear a striking resemblance to the lead up to the Great Depression, the 2008 financial crisis, and what could still happen with the AI boom.

Everyone seemed to have agreed that the market was grossly overvalued and that a crash was bound to come. But each had been convinced that when the music stopped, the would be able to exit. And so as the market had continued rising, Austrian investors had remained invested. It was a pattern that would be repeated many times over the next decades. When the crash finally came, it was so sudden that no one had time to escape.

What's more, is the effects it had afterwards. The book goes over the aftershocks it caused throughout the world. In the United States, you could link the crash to the Compromise of 1877 that saw Rutherford B. Hayes assume the presidency in exchange for ending reconstruction early and allow for the rise of Jim Crow segregation laws. In Europe, you saw the weakening of the Ottoman Empire and the rise of a united Germany as a world power.

The book was incredibly fascinating and provided insight into a period of time I was not aware of.