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on July 6, 2009
This is a book that everyone should read. Most won't, of course, and 'tis a pity. Lords of Finance will be one of the best finance or history books published this year and quite likely will be one of the best of any book released in 2009.

Admittedly the story of four central bankers in the 1920s and 30s doesn't sound like it would be on anyone's must read list. But Liaquat Ahamed uses the outsize personalities of the bankers of the U.S., Britain, France and Germany to give a human face to the events that led up to the Great Depression. Ahamed deftly limns the personalities with telling details that any literary writer would envy. He's a hedge fund adviser and has worked for the World Bank but his clear, concise prose marks him as a veteran writer.

The book is impressively researched - there's a massive bibliography and Ahamed had access to private journals - yet rarely do we feel that he's trying to cram details just to show the research. Ahamed gives us the context, the psyche of the players and public and demonstrates a firm grasp of wide variety of topics. He also judiciously sprinkles in a few salacious details of the foibles of the wealthy and the aristocratic. Although finance is a common thread, the book is jargon free and dips into monetary theory only explain the consequences of the events.

The last book that I read that combined prodigious research, clear reporting and, most importantly, a desire to be fair is "The Assassins' Gate", George Packer's superb 2006 account of the American occupation of Iraq. Lords of Finance is perhaps more impressive because the scope is epic and the timeline is longer. Ahamed admirably organizes the chaos into a coherent narrative.

He examines the events from four sides - showing how each country reacts to the events. He unabashedly criticizes stupidity and doles out praise. And he tries to do it through the lens of the times rather than with the omniscience of hindsight.

Most of us are aware of the troubles of the 1930s but the 1920s were surprisingly turbulent - today's events are a mere tempest in comparison. Most of these events were news to me and I greedily devoured this book to find out what happened next,

It takes a rare talent to take complex events and turn it into a readable tale. This book is a triumph.
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on March 26, 2011
In the Pulitzer Prize winning book <em>Lords of Finance</em>, Ahamed turns the seemingly mundane world of central banking into a gripping page-turner worthy of Grisham or LeCarre. It is the story of the dawn of the modern age of monetary policy and the turbulent period of the early 20th century that shaped it, and was shaped by it. More importantly, it reveals how decisions about such things as interest rates and money supply by four central bankers in London, Berlin, Paris and New York laid the foundation for German hyper-inflation of the 1920s, the stock market crash of 1929, the Great Depression and ultimately the rise of Nazism and the Second World War.

Although many of the familiar names of this period, such as Churchill, Hitler and Roosevelt, play key roles in Ahamed's saga, the prime characters are Montagu Norman (of the UK), Benjamin Strong (of the US), Hjalmar Schacht (of Germany) and Emile Moreau (of France). The inter-related lives of these four complicated (and somewhat peculiar) men are recounted in vivid detail from the early days of the century prior to the First World War through to the aftermath of the Second World War, which ultimately led to the abandonment of the gold standard and the international monetary reforms adopted at Bretton Woods, New Hampshire creating the World Bank and the International Monetary Fund.

Ahamed succeeds in both entertaining and informing the reader by combining an adept critique of the economic policy decisions of the time with a very human story of the lives (both successes and failings) of four financial giants of the time whose names are otherwise largely lost to history. The story is particularly poignant given the prominent role that central bankers and their decisions have played in the media during the financial crisis that has gripped the world in recent years.
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on August 24, 2010
.. a lack of understanding about how the economy operated.'

Looking back at the Great Depression of the 1930s and its consequences, it's easy to believe that the causes were beyond the control of individuals or government. Liaquat Ahamed contends that this was not the case, and makes a case that the decisions taken (or perhaps not taken) by a small number of central bankers were the primary cause. These men were the members of `the most exclusive Club in the world': Montagu Norman of the Bank of England; Benjamin Strong of the New York Federal Reserve Bank; Hjalmar Schacht of the Reichsbank; and Émile Moreau of the Banque de France. Each of these men had his own distinctive style and personality, each has his own strengths and weaknesses. Much of this book provides biographical detail about each of these men and John Maynard Keynes, with briefer sketches of other key figures. This detail, together with the relevant history, political and economic commentary, is important in understanding what actions were taken, and why.

The book starts in 1914 and provides a global financial history which covers the financing of World War One; the protracted arguments over war reparations; Weimar Germany's hyperinflation; discussion of the gold standard and related problems; the 1929 stock market crash; serial bank panics and the responses to each by governments and central banks. And, of course, the economic thinking of John Maynard Keynes.

My main interest in reading this book was twofold: to revisit 20th century history in the period between the World Wars; and to read more about the causes of the Great Depression. While I'm not convinced that Keynesian economics holds all of the answers, it certainly seems that economists, bankers and governments have not applied all of the learning that should have been gleaned from the events of the 1920s and 1930s, and which may have lessened the impact of the events which started in 2007.

Jennifer Cameron-Smith
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on May 31, 2009
A masterful account of how upright men, committed to an orthodoxy of sound money based on the gold standard set of the fertile grounds for the great depression, given their inability to juggle the outcomes of WW I.
It is accurate with respect to technical details, presents a picture of the individual men committed to values, and does this in clear, straightforward story telling. This is a pleasant read that serves as a cautionary tale for our times about fixed ideas, pragmatism, and politics.
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TOP 50 REVIEWERon April 20, 2011
This is a brilliant book that should be of interest to anyone interested in economics, finance or economic history. It is a meticulously researched and very well written history and analysis of the economic policies in the world's leading nations over the three decades leading to the Great Depression using the central banks and central bankers of the USA, Great Britain, France and Germany as the main characters.

There are fascinating stories throughout. One of my favorites is about Winston Churchill, as Britain's Chancellor of the Exchequer in the 1920s, having to decide whether to return Britain to the gold standard in 1926 after having abandoned it during WW1.

Apparently Churchill formed opinions and decisions on policy by writing essays for himself detailing the pros and cons of the issue at hand. By writing such an essay on whether Britain should return to the gold standard, Churchill convinced himself that it should not. This opinion was apparently reinforced at a dinner party - attended by John Maynard Keynes, leading figures in the Bank of England and other prominent economic advisers - that Churchill gave specifically for the purpose of discussing the gold standard. Keynes advised against returning to the gold standard and left the party convinced that Churchill agreed with him.

Churchill apparently did agree with Keynes but the Bank of England representatives present at the dinner party got to Churchill after the party and managed to change his mind. Britain went back on the gold standard, which raised the value of the pound sterling to unsustainable levels, made British exports uncompetitive, devastated British industry and created massive unemployment.

Churchill later acknowledged that he had made a poor decision and regretted having made it.

This book is full of such stories. If you're interested in economics, economic history, finance or 20th century history, you'll like this book. If only all economic and financial histories were of this quality.....

Addition to my original post:

I'm writing this just after the US credit rating has been downgraded from AAA to Aaa and the Chinese government has publically told the US it has to get its finances in order to protect Chinese investments is US government debt. As these events unfold, many commentators in the financial media are advocating a return to the gold standard.

With a return to the gold standard being promoted in some parts of the financial media, this book becomes all the more relevant, It's all about the gold standard and the problems the central bankers of the four leading economies of the period) (1890-1930s) had in maintaining it. With the current world financial situation, this financial history should be required reading.
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on February 3, 2016
very enjoyable read especially for someone with a strong background in economics or finance. Deserving of all awards it has received.
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TOP 500 REVIEWERon January 24, 2011
The perils of deflation and inflation, the punitive and long-lasting impact of war reparations, the difficulties of the gold standard (which had worked for many years due to the coincidental rate of economic growth and the addition of new gold reserves); dry themes to be sure, but ones which in the hands of author Liaquat Ahamed flow easily through the global economic turbulence of the 1920s and 30s. Lords of Finance is a sweeping narrative focusing on France, Britain, Germany and the US, and the central bankers who were responsible for their monetary policy. The story covers several decades and a phalanx of leaders, and unfolds chronologically with players entering and exiting the world economic stage in due course - a cast and story worthy of a Cecil B. DeMille movie, and handled with equal panache. Ahamed deservedly garnered a Pulitzer Prize for this book (and ironically given their role in the current financial turbulence, Goldman Sachs' "Business Book of the Year" honours).

What sets this book apart from other non-fiction texts are the author's twin strenghts of character and plot development. Just as Charles Dickens detailed the lives of fictional, ordinary citizens living a half a century earlier with his wonderful, larger than life caricatures and in doing so captured the tenor of the time, Ahamed brings to life the larger-than-life players on the global economic stage between the two World Wars. After explaining the development and role of central banks and the gold standard, Ahamed focuses on character development and is able to weave a first rate story from otherwise dry material.

The book has the best characteristics of Sorkin's 'Too Big To Fail', Galbraith's 'The Great Crash 1929', and Ferguson's 'The Ascent Of Money': details of relationships, decisions, results and repercussions; historical perspective and a flair with language; and an ability to narrate important events from a non-traditional, economic perspective, respectively. The following quote is typical of Ahamed''s style, "While the Bank of England was a solidly bourgeois institution, egalitarian in the way that an exclusive men's club is democratic among its members, the Banque de France was from its birth an aristocratic place, even if the aristocracy was only a few years old". Beautiful prose that is expanded upon with further relevant details about each institution and their relationships with each other.

There are many parallels to today. For example, Ahamed, writing of the excessive runups in Florida real estate and in the stock market in the late 1920s, notes the belief of some at the time (Commerce Secretary Herbert Hoover included) that the Federal Reserve's 'policy of keeping interest rates artifically low' was responsible for fueling the incipient bubble.' One cannot help thinking of Alan Greenspan and the stock market and housing bubbles of recent times. Similarly, writing of 1932 Ahamed states, "Bankers were now seen as crooks and rogues," and of 1933 "that the public was soon riveted by the tales of financial skullduggery in high places".

The parallels lead one to ruminate about the state of world affairs today, about American and other Western nations'' fiscal and balance of trade deficits, about inflationary and deflationary pressures, and about the unforeseen chain reaction of events from seemingly isolated decisions and misteps by nations'' leaders. The brief epilogue helps readers draw some parallels to financial crises of the past fifteen years or so. History may not repeat, or even rhyme, but it can make for a prize winning and thought provoking narrative a few years on. An excellent book.
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on May 11, 2016
Interesting reading. Well detailed. Recommend it.
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on January 22, 2015
hard to ready but very nice book
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