The Deluge by Adam Tooze
This book, written by an economist, offers an interesting analysis of of the period from 1916 to the Great Depression. Tooze picks an interesting moment to begin the book – 1916, The Battle of Verdun, the moment the money ran out for the Allies and America became the world’s banker (NY supplanting London), and therefore the hegemonic power of the world, which continues to this day.
I read a couple of the chapters focusing on the years of 1919 and 1920 which were very illuminating. “The explanatory power of economic history” at its best, perhaps. Looking at how the war debts and reparations and other financial factors that dominated that period through the eyes of a historian and economist is quite revealing. The financial maneuvers are all too familiar, unfortunately. It’s amazing how important it is to understand government bonds, entitlement policies and interest rates to understand much of the twentieth century’s woes. For example, understanding the role of Liberty bonds – and the interest rate on them – is an important thread of that story, especially in understanding 1920 and what followed.
I am interested in this pattern of war, followed by war debts, as an important historical ingredient in the history of nations. In addition to understanding the military and political battlefields, I increasingly think it is just as crucial to understand the monetary battlefields to properly understand the twentieth century.
The last chapter is on the Great Depression and by that point Tooze has ostensibly given the reader the requisite political and economic grounding to understand how the deflation-inducing policies of austerity and isolationism came to be the first instinct of the nations, plunging the world into disaster.