2008. 1929. 1907. 1893. These dates strike fear into the heart of every investor. Panics, crashes, and bear markets have been part of the investing ecosystem for as long as markets have existed. Some say they are the price of progress – others, a flaw in the system. Whatever you think of periodic market crashes, they’re here to stay.
But, the farther back you go, the less we know about each episode. Now, thanks to the investor and financial historian Liaquat Ahamed’s beautifully written new book, 1873: The Rothschilds, the First Great Depression, and the Making of the Modern World, we can learn a lot more about the wild events of 1873 in Europe (and to some extent the United States) and the period that followed, sometimes called the Long Depression. I’ll argue that the aftermath of 1873 was not a depression, but a deflationary boom – a pattern with which most modern readers are unfamiliar.
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