Released at the beginning of the year, this book has gathered more critical acclaim with every passing month. And with good reason. Liaquat Ahamad puts his background in investment management, which includes having headed the World Bank?s investment division, to such good use that his narration stands out even in a market seemingly oversaturated with books on financial crises. As has been noted in many a review already, his choice of dramatic personae of the Depression era is quite sensational. Four central bankers?from England, France, Germany and the US?who were once styled the world?s most exclusive club and have been forgotten since, are seen battling challenges eerily similar to those of today: ?dramatic movements in stock markets, volatile currencies, and great tides of capital spilling from one financial centre to another?. This is in moving contrast to how archaic the prejudices of their community now seem, ranging as they did from anti-Semitism to a love of the gold standard. So different was the tempo of their world that they would telephone each other only in extremities, and then too with some difficulty.
This book is a reflection on evolutionary hubris. Does today?s financial crisis call for tackling new challenges? But how similar were conversations back then, Ahamad reminds us. Sure, the notion of combating the business cycle with an active monetary policy was novel. But then too they were debating whether injecting liquidity into the banking system would jump- start it or just another speculative bubble of the kind that had short-circuited it in the first place.
And there is the shadow of John Maynard Keynes arching over the entire narrative. Counterpointing the four lords of finance, this
Cambridge gadfly became Britain?s principal wartime economic strategist and helped create an international financial system that tempered the rigidities of the gold standard.
Ahamad also strikes a populist chord by assuring readers that there was indeed some human agency to blame for the Great Depression?it was neither an act of God nor the reflection of capitalism?s inherent flaws. In today?s terms, Germany?s war debt touched $2.4 trillion, France?s $1.4 trillion and Britain?s $800 billion. Once the politicians and bankers had blundered the world to such a state, the fault lines they created had to crack sooner or later.
