Seven Crashes, page 40
25. “Wall Street Topics,” New York Times.
26. Schäffle, “Der ‘grosse Börsenkrach’ des Jahres 1873,” 24.
27. Ibid., 25: “Und der Grosse frisst den Kleinen und der Grösste frisst den Grossen.”
28. Julian Franks, Colin Mayer, and Hannes Wagner, “The Origins of the German Corporation: Finance, Ownership and Control,” Review of Finance 10, no. 4 (2006): 537–585; Scott Mixon, “The Crisis of 1873: Perspectives from Multiple Asset Classes,” Journal of Economic History 68, no. 3 (2008): 722–757.
29. Gordon Mork, “The Prussian Railway Scandal of 1873: Economics and Politics in the German Empire,” European Studies Review 1, no. 1 (1971): 37.
30. John R. Lampe and Marvin R. Jackson, “Balkan Economic History, 1550 –1950, from Imperial Borderlands to Developing Nations,” Joint Committee on Eastern Europe Publication Series No. 10, 1982, 103 –104.
31. Bethel Henry Strousberg, Strousberg und Sein Wirken von Ihm Selbst Geschildert. Mit Einer Photographie und Einer Eisenbahn-Karte (Berlin: J. Guttentag, 1876), 5; see also Gordon R. Mork, “The Prussian Railway Scandal of 1873.”
32. Strousberg, Strousberg, 293.
33. Otto Glagau, Die Gartenlaube (Leipzig: Ernst Keil, 1874), 788.
34. Otto Glagau, Der Börsen- und Gründerschwindel in Berlin (Leipzig: Paul Frohberg, 1876).
35. Mary A. O’Sullivan, Dividends of Development: Securities Markets in the History of US Capitalism, 1866–1922 (Oxford: Oxford University Press, 2016), 29, 36.
36. Richard White, Railroaded (New York: W. W. Norton, 2011), 500 –501.
37. Matthew Simon, Cyclical Fluctuations and the International Capital Movements of the United States, 1865–1897 (New York: Arno Press, 1978).
38. Ellis Paxson Oberholtzer, Jay Cooke, Financier of the Civil War (Philadelphia: G. W. Jacobs, 1907), 2: 421–422.
39. Ibid., 2: 437.
40. O’Sullivan, Dividends, 65.
41. O. M. W. Sprague, History of Crises under the National Banking System (Washington, D.C.: United States Senate Document No. 538, 1910).
42. Elmus Wicker, Banking Panics of the Gilded Age (New York: Cambridge University Press, 2000), 18.
43. Anna J. Schwartz, Money in Historical Perspective (Chicago: University of Chicago Press, 1987), 286.
44. Charles P. Kindleberger, Historical Economics: Art or Science? (Berkeley: University of California Press, 1990), 316.
45. Anthony Trollope, An Autobiography (London: Trollope Society, 1999 [1883]), 220.
46. Anthony Trollope, The Way We Live Now (Oxford: Oxford University Press, 1982 [1875]), 1: 34, 1: 204, 2: 104.
47. Ibid., 2:313; 2:301.
48. David Morier Evans, The History of the Commercial Crisis, 1857–58, and the Stock Exchange Panic of 1859 (London: Groombridge and Sons, 1859).
49. Friedrich Spielhagen, Sturmflut (Leipzig: Staackmann, 1878 [1877]), 65.
50. Ibid., 572.
51. Joseph E. Stiglitz, “Capital Market Liberalization and Exchange Rate Regimes: Risk without Reward,” Annals of the American Academy of Political and Social Science 579, no. 1 (2002): 231.
52. Jack Wilson, Richard Sylla, and Charles Jones, “Financial Market Volatility, Panics under the National Banking System before 1914, and Volatility in the Long Run, 1830 –1988,” in Crises and Panics: The Lessons of History, ed. Eugene White (Dow Jones/Irwin: Homewood, 1990), 103.
53. William Newmarch, “Address by William Newmarch, Esq., F.R.S., as President of the Economy and Trade Department, Social Science Association, at Leeds, 10th October, 1871,” Journal of the Statistical Society of London 34, no. 4 (December 1871): 476.
54. Friedrich Hayek, “Carl Menger,” in Carl Menger (1840–1921), ed. Mark Blaug (Brookfield: Edward Elgar, 1992), 43.
55. There is a brief survey of his life by Heinz D. Kurz, “Wer war Hermann Heinrich Gossen (1810 –1858), Namensgeber eines der Preise des Vereins für Socialpolitik?” Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts-und Sozialwissenschaften 129, no. 3 (2009): 473 –500; see also Nina Streeck, “Hermann Heinrich Gossen: Nationalökonom,” http://www.rheinische-geschichte.lvr.de/Persoenlichkeiten/hermann-heinrich-gossen/DE-2086/lido/57c6d4a79880e2.20826584.
56. Carl Menger, Principles of Economics (Glencoe: Free Press, 1950), 192.
57. William Stanley Jevons, The Theory of Political Economy (New York: Macmillan, 1888), xiii–xiv.
58. William Stanley Jevons, Political Economy (London: Macmillan, 1878), 17.
59. “Letter to his brother Herbert, 1st June 1860,” in Jevons, Papers and Correspondence, 151–152.
60. “To Professor Léon Walras, Lausanne, 12th May 1874,” ibid., 302–303.
61. Quoted in Harro Maas, William Stanley Jevons and the Making of Modern Economics (Cambridge: Cambridge University Press, 2005), 3.
62. Jevons, Papers and Correspondence, 192.
63. On the impact of Australian gold on economics, see Michael Bordo, “John E. Cairnes on the Effects of the Australian Gold Discoveries, 1851–73: An Early Application of the Methodology of Positive Economics,” History of Political Economy 7, no. 3 (1975): 337–359.
64. W. Stanley Jevons, A Serious Fall in the Value of Gold Ascertained, and Its Social Effects Set Forth (London: E. Stanford, 1863), 1–2.
65. W. Stanley Jevons, The Coal Question: An Enquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal-Mines (London: Macmillan, 1865), viii.
66. Ibid., 339.
67. William Stanley Jevons, Investigations in Currency and Finance (London: Macmillan, 1909), 221.
68. Albert Jolink, The Evolutionist Economics of Léon Walras (New York: Routledge, 1996), 23.
69. Léon Walras, Correspondence of Léon Walras and Related Papers (Amsterdam: North-Holland, 1965), 3: 292–293: “C’est mon père qui m’a fourni les définitions économiques qui sont les bases de ce système; c’est Cournot qui m’a fourni le langage mathématique le plus propre à le formuler; mais c’est moi qui ai donné, non seulement l’exposition complète, mais la démonstration rigoureuse du système de la libre concurrence en matière d’échange et de production comme réalisant le maximum d’utilité.”
70. Hayek, “Menger,” 44.
71. Emil Kauder, “Intellectual and Political Roots of the Older Austrian School,” in Carl Menger (1840–1921), ed. Mark Blaug (Brookfield: Edward Elgar, 1992), 99: “la méthode mathématique est fausse.”
72. Carl Menger, Untersuchungen über die Methode der Socialwissenschaften und der Politischen Oekonomie (Leipzig: Duncker & Humblot, 1883), vii–viii.
73. Carl Menger, Zusätze zur Grundsätze der Volkswirtschaft (Tokyo: Hitotsubashi University, 1961), 29: “Alles was und beglückt erfreut fördert nennt man im gemeinem Leben ein Gut: Gott ist das höchste Gut.”
74. Hayek, “Menger,” 47.
75. “To M. Léon Walras, Lausanne, 14th February 1875,” in Jevons, Papers and Correspondence, 332.
76. “To H. S. Foxwell, 16th November 1875,” ibid., 344.
3. The Great War and the Great Inflation
1. Steve H. Hanke and Nicholas Krus, World Inflation and Hyperinflation Table, https://www.cato.org/research/world-inflation-and-hyperinflation-table.
2. David Marquand, Ramsay MacDonald (London: J. Cape, 1977), 669.
3. George F. Kennan, The Decline of Bismarck’s European Order (Princeton: Princeton University Press, 1981), 3.
4. See Adam Tooze, The Deluge: The Great War and the Remaking of Global Order, 1919–1931 (London: Allen Lane, 2014).
5. I owe this point to an illuminating discussion of Alexander Kluge with Stephan Drössler in the Munich Film Museum, August 8, 2021.
6. William Silber, When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America’s Monetary Supremacy (Princeton: Princeton University Press, 2007).
7. Richard Roberts, Saving the City: The Great Financial Crisis of 1914 (Oxford: Oxford University Press, 2014); Mike Anson, David Bholat, Mark Billings, Miao Kang, and Ryland Thomas, “The Great War and the Bank of England as Market Maker of Last Resort,” Bank Underground, April 30, 2019, https://bankunderground.co.uk/2019/04/30/the-great-war-and-the-bank-of-england-as-market-maker-of-last-resort/.
8. Gerald D. Feldman, The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914–1924 (New York: Oxford University Press, 1997), 32.
9. “Agriculture—Agricultural Production in Continental Europe during 1914–1918 War and Reconstruction Period,” 1944, League of Nations Archives, Geneva, R4381/10A/42706/1682, 61–68.
10. Quoted in Norman Angell, The Great Illusion: A Study of the Relation of Military Power in Nations to Their Economic and Social Advantage (New York: G. P. Putnam’s Sons, 1910), 6.
11. Nicholas A. Lambert, Planning Armageddon: British Economic Warfare and the First World War (Cambridge, MA: Harvard University Press, 2012), 120 –121.
12. Angell, Great Illusion, 32.
13. Ibid., 343, 346.
14. John G. Williamson, Karl Helfferich, 1872–1924: Economist, Financier, Politician (Princeton: Princeton University Press, 1971), 54, citing Helfferich’s lecture on Handelspolitik, 1901.
15. David Garnett, The Golden Echo (London: Chatto & Windus, 1954), 271. This remark is attributed by Niall Ferguson as occurring in a discussion with Beatrice Webb: Niall Ferguson, The War of the World: History’s Age of Hatred (London: Allen Lane, 2006), 89.
16. Niklaus Meier, Warum Krieg?: Die Sinndeutung des Krieges in der deutschen Militärelite 1871–1945 (Paderborn: Ferdinand Schöningh, 2012), 274: “Dieser Krieg wird sich zu einem Weltkriege auswachsen, in den auch England eingreifen wird. Nur Wenige können sich eine Vorstellung über den Umfang, die Dauer und das Ende dieses Krieges machen. Wie das alles enden soll, ahnt heute niemand.”
17. Ibid., 272.
18. Maureen Healy, Vienna and the Fall of the Habsburg Empire: Total War and Everyday Life in World War I (New York: Cambridge University Press, 2004), 17.
19. Karin Hartewig, Das unberechenbare Jahrzehnt. Bergarbeiter und ihre Familien im Ruhrgebiet 1914–1924 (Munich: Beck, 1993), 153; see also Alice Weinreb, Modern Hungers: Food and Power in Twentieth-Century Germany (New York: Oxford University Press, 2017).
20. Hans Hautmann, “Hunger ist ein schlechter Koch. Die Ernährungslage der österreichischen Arbeiter im Ersten Weltkrieg,” in Bewegung und Klasse. Studien zur österreichischen Arbeitergeschichte, ed. Gerhard Botz (Zurich: Ludwig-Boltzmann-Institut für Geschichte der Arbeiterbewegung, 1978), 661–682; see also Healy, Vienna and the Fall of the Habsburg Empire.
21. Belinda Davis, Home Fires Burning: Food, Politics, and Everyday Life in World War I Berlin (Chapel Hill: University of North Carolina Press, 2000).
22. Thomas Mann, Diaries, 1918–1939, selected by Hermann Kesten; translated by Richard and Clara Winston (New York: Harry N. Abrams, 1982), 43; Hermann Kurzke, Thomas Mann: Life as a Work of Art, trans. Leslie Willson (Princeton: Princeton University Press, 2002), 287.
23. Avner Offer, The First World War: An Agrarian Interpretation (New York: Oxford University Press, 1989), 52.
24. Keith Allen, “Sharing Scarcity: Bread Rationing and the First World War in Berlin, 1914 –1923,” Journal of Social History 32, no. 2 (1998): 381.
25. Gerald D. Feldman, The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914–1924 (New York: Oxford University Press, 1993), 64.
26. Norman Stone, The Eastern Front, 1914–1917 (London: Hodder and Stoughton, 1975), 293 –300.
27. Barbara Alpern Engel, “Not by Bread Alone: Subsistence Riots in Russia during World War I,” Journal of Modern History 69, no. 4 (1997): 696 –721.
28. Offer, First World War, 85.
29. Lambert, Armageddon, 332.
30. Ibid., 335.
31. Richard Perren, Taste, Trade and Technology: The Development of the International Meat Industry since 1840 (London: Routledge, 2017), 99–100.
32. Frank Trentmann, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain (New York: Oxford University Press, 2008), 194 –197.
33. Calculated from Norman J. Silberling, “Financial and Monetary Policy of Great Britain during the Napoleonic Wars,” Quarterly Journal of Economics 38, no. 2 (1924): 214 –233; the average annual spending on war was £543 million in the French wars, £5418 million in the First World War.
34. David Ricardo, “Essay on the Funding System [1820],” in The Works of David Ricardo, ed. J. R. McCulloch (London: John Murray, 1846), 541.
35. Ibid., 546.
36. Arthur Cecil Pigou, The Economy and Finance of the War: Being a Discussion of the Real Costs of the War and the Way in Which They Should Be Met (London: J. M. Dent & Sons, 1916), 69.
37. Ibid., 70.
38. Ibid., 82–83.
39. Adolph Wagner, Grundlegung der politischen Ökonomie (Leipzig: C. F. Winter, 1892), 893 –894.
40. David Lloyd George, War Memoirs (Boston: Little Brown, 1933), 110 –111; T. Johnston, The Financiers and the Nation (London: Methuen, 1934).
41. Johnston, The Financiers and the Nation, 53, 60 –61.
42. Robert Skidelsky, John Maynard Keynes, vol. 1: Hopes Betrayed, 1883–1920 (London: Macmillan, 1983), 311.
43. “Bond Market: Great Britain’s Debt in Relation to Her Wealth and Annual Income,” Wall Street Journal, October 15, 1915; see in general Kathleen Burk, Britain, America and the Sinews of War, 1914–1918 (London: G. Allen & Unwin, 1985).
44. Verhandlungen des Reichstages (Negotiations of the Reichstag) (Berlin: Druck und Verlag der Norddeutschen, 1907–1918), 306: 763, March 16, 1916.
45. Ibid., August 20, 1915.
46. Ibid., March 10, 1915.
47. “Lauds Germany’s Financial Power,” New York Times, April 12, 1915.
48. “Germany’s Loan Biggest Yet Raised; Subscriptions of $2,140,000,000 Include Those of Servant Girls; Money Market Is Easy; Banks Have Large Supplies of Cash—January Savings Deposits Over $90,000,000,” New York Times, April 12, 1915.
49. “Bond Market,” Wall Street Journal, April 22, 1915.
50. “War Loan Failure Worries Vienna,” New York Times, June 16, 1915.
51. Feldman, Great Disorder, 71.
52. Pavel Kosatík, Ðeští demokraté (Prague: Mladá fronta, 2010), 131–132.
53. Ludek Homolac and Karel Tomsik, “Historical Development of Land Ownership in the Czech Republic since the Foundation of Czechoslovakia until Present,” Agricultural Economics 62, no. 11 (2016): 528 –536.
54. Stephen A. Schuker, American “Reparations” to Germany, 1919–33: Implications for the Third-World Debt Crisis (Princeton: International Finance Section, Department of Economics, Princeton University, 1988), 22.
55. This point was already noted in the contemporary U.S press: “Mark Inflation Seen as Gigantic Fraud; Holders in United States,” Wall Street Journal, October 6, 1921. See in general Carl-Ludwig Holtfrerich, The German Inflation 1914–1923, transl. Theo Balderston (Berlin: De Gruyter, 1986).
56. See Nathan Marcus, Austrian Reconstruction and the Collapse of Global Finance, 1921–1931 (Cambridge, MA: Harvard University Press, 2018), 63 –73.
57. Elias Canetti, Masse und Macht (Hamburg: Claassen, 1960).
58. Georg Friedrich Knapp, The State Theory of Money, trans. H. M. Lucas and J. Bonar (London: Macmillan, 1924), 8: 38.
59. Karl Theodor Helfferich, Louis Infield, and T. E. Gregory, Money (London: E. Benn, 1927), vii.
60. Howard S. Ellis, German Monetary Theory, 1905–1933 (Cambridge, MA: Harvard University Press, 1934), 37.
61. Knapp, State Theory, 226.
62. Stephanie Kelton, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy (New York: Public Affairs, 2020), 10 –11, 90, 207.
63. Barry Eichengreen and Ricardo Hausmann, “Exchange Rates and Financial Fragility,” NBER Working Paper No. 7418, 1999.
64. Ellis, German Monetary Theory, 38.
65. Williamson, Karl Helfferich, 26.
66. Helfferich, Money, 505.
67. Ibid., 547–548.
68. Ibid., 544, 619.
69. Ibid., 621.
70. Lothar Gall, “The Deutsche Bank, 1870 –1914,” in The Deutsche Bank, 1870–1995, ed. Lothar Gall et al. (London: Weidenfeld & Nicolson, 1995), 95; see also Manfred Pohl, Von Stambul nach Bagdad: Die Geschichte einer berühmten Eisenbahn (Munich: Piper, 1999).
71. Karl Helfferich, Deutschlands Volkswohlstand 1888–1913 (Berlin: Stilke, 1914), iv.
72. Ibid., viii.
73. Helfferich, Money, 234, 236.
74. Williamson, Karl Helfferich, 338.
75. Ibid., 301.
76. Verhandlungen des Reichstags, 356, 8058: “Da steht der Feind, der sein Gift in die Wunden eines Volkes träufelt.—Da steht der Feind—und darüber ist kein Zweifel: dieser Feind steht rechts!”
77. Williamson, Karl Helfferich, 400.
4. The Great Depression
1. Ferdinand Fried (an alias for Friedrich Zimmermann), Das Ende des Kapitalismus (Jena: E. Diederichs, 1931), 247.
2. Joshua Derman, “Prophet of a Partitioned World: Ferdinand Fried, ‘Great Spaces,’ and the Dialectics of Deglobalization, 1929–1950,” Modern Intellectual History 2020: 1–25.
3. Ben S. Bernanke, Essays on the Great Depression (Princeton: Princeton University Press, 2004), 5.
4. J. D. Tomlinson, “The First World War and British Cotton Piece Exports to India,” Economic History Review 32, no. 4 (1979): 497.
5. G. C. Allen, A Short Economic History of Modern Japan: 1867–1937 (London: Routledge, 2003), 113.
6. Japan, The Japan Year Book, vol. 17 (Tokyo: Japan Year Book Office, 1923), 553.
7. “Agriculture—Agricultural Production in Continental Europe during 1914–1918 War and Reconstruction Period,” 1944, League of Nations Archives, Geneva, R4381/10A/42706/1682, 61–68.
8. On debt and economic constraints, see Michael D. Bordo and Christopher M. Meissner, “Original Sin and the Great Depression,” NBER Working Paper No. 27067, April 2020.
9. Phyllis Deane and Brian Mitchell, Abstract of British Historical Statistics (Cambridge: Cambridge University Press, 1971), 62–66.
