Ahamed L.

Lords of Finance: The Bankers who Turned the World Upside down. from English.

Moscow: Alpina Publishers, 2010, 467 p. 2300 copies. (p) ISBN 978-5-9614-1278-9

First , a photograph: "Montagu Norman on the Duchess of York liner, August 15, 1931." You look and bite your elbows: oh, what a wonderful time! Different tempos, different images, different flavors. Different costumes and ship outlines. The golden Age. Cursed and terrible - for in those days the world was recovering from a catastrophe, experiencing a catastrophe, and anticipating a future catastrophe. The entire first half of the twentieth century was, from the point of view of the current spoiled and accustomed to stability generation, a complete disaster. And Norman Montagu became one of those who had a hand in its creation.

Liaquat Ahamed, who knows the cuisine of the global financial system from the inside, wrote about how easily professional bankers, guided by their ideas, ideals and prejudices, are able to plunge the world into a nightmare. The four main characters in his book, Montagu Norman, Benjamin Strong, Hjalmar Schacht and Emile Moreau (how many people know these names today?), led the world to the Great Depression and greatly contributed to the outbreak of World War II, for one reason only - they firmly believed in the gold standard. According to these ideas, all major currencies had to be backed by gold reserves, and their value had to correspond to a certain amount of gold. Accordingly, "every major central bank was willing to exchange any amount of domestic currency for gold bullion." It would seem that this is a good thing - governments had to live within their means, inflation remained low, because "the amount of money that could be put into circulation was determined by the volume of gold reserves." At the same time, the gold standard also acted as a psychological factor: "it was a confirmation of all the Victorian virtues of the economy of those times and prudence in public policy." Ahamed quotes H. G. Wells as remarking that there was a "fascinating, blunt honesty" about the gold standard. The world seemed to be extremely solid and stable-of course, there had been no wars for forty years (and the ones that had happened were on some godforsaken outskirts - in South Africa, in the Philippines, in the Far East). The only problem was that for the economy of the first half of the twentieth century, adherence to this principle was disastrous, the gold standard was a straitjacket for them.

Don't mistake this book for a study of the economic background of the Great Depression. These are private stories, and Ahamed builds it as a classic comparative biography, considering the fate of his characters in key years.

Here is the eve of the First World War. Here is 1924, the "Dawes plan" to restore the German economy (not for the sake of charity, but so that it can pay reparations)... Here is the stock market frenzy in the United States in 1926... By the beginning of the Great Depression, the book's characters already occupy the highest position in the financial world: "the nervous and mysterious Montague Norman, governor of the Bank of England; the suspicious and cautious Emile Moreau, head of the Bank of France; the stubborn and arrogant yet intelligent and resourceful Hjalmar Schacht, head of the Reichsbank; and finally, the head of the Federal Reserve Bank of New York, Benjamin Strong, whose energy and drive hid a deep mental breakdown". They made decisions based on the ideas and beliefs of their youth, trying in vain to return the financial system to the stability of the "beautiful era", to the golden 1913. Perhaps they understood that the stable and peaceful world of the gold standard was gone forever - on the eve of World War II, Norman predicted that " the England as we know it will come to an end... The empire will lose its power and territory, which will reduce it to the level of other states."

Well, they were bright personalities, but they did not catch the spirit of the times and did not cope with the situation. Others managed it. One of them is Maynard Keynes, who was never taken seriously while the gold standard was still in effect. It turned out, however, that Keynes had caught the zeitgeist more accurately - and he was not alone in this. We owe it to the current global financial system, which has been shaking like it did in the late 1920s since 2008, when Ahamed's book went out of print...

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