Books of Interest
Website: chetyarbrough.blog
1873 (The Rothschilds, the First Great Depression, and the Making of the Modern World)
Author: Liaquat Ahamed
Narration by: George Newbern

Liaquat Ahamed (Author, American financial historian.)
Liaquat Ahamed’s book, “1873”, has been somewhat anxiously awaited for by the public because of his previous book “Lords of Finance” which reported central bankers’ roles in the Great Depression. Talk of depression swirls around the public today. What parallels are there between “1873” and the current world financial market? Liaquat Ahamed explains the impact of railroad expansion and world trade that exploded in the 19th century. He suggests that explosion seems parallel to today’s impact of transformative technology like A.I. which has shown potential for productivity increase around the world. That expectation magnifies the amount of capital being invested in a changing paradigm in society that Ahamad argues is similar while different from railroad introduction in the 19th century.

Globalization of information technology.
Globalization makes change more impactful today because of the world wide web and a potential for spreading useful and harmful information. Ahamed suggests the vast investment in railroads has parallels to communication technology’s introduction in today’s economy. The rush to create datacenters requires large capital investments with the creation of data centers that challenge today’s energy availability. Corruption became common in the 19th century with schemes designed to lure nations and investors into impractical investments. Ahamed recounts grifter’ pitches in the 19th century similar to crypto bubble makers of the 21st century. In the 19th century, mostly banks, governments, and wealthy risk takers were making foolish investment risks for hoped-for wealth. Today, crypto bubble makers reach into the pockets of the poor and middleclass.

Crypto investment.
As the public today becomes skeptical about tech investments, the banks of the 19th century belatedly turned skeptical about transportation system expansion. The growing malaise of recession turned into a depression in the 19th century. Ahamed argues today is similar to what caused the 19th century economy to slip into recession and depression. Ahamed suggests the political polarization occurring in the 19th century is evident in today’s political climate. The split between Trump supporters and detractors is widespread in America. Trump’s attacks on global cooperation seem similar to what occurred in the 19th century. Like the farmers of 1873, factions of America resent their loss of jobs and manufacturing income to other countries. The geopolitical shocks of the Ukraine war, America’s bombing of Iran, Russia’s Ukraine war, and growing tensions with China magnify inflation and create capital reallocations that harm respective economies and increase potential for world-wide financial collapse.
Ahamed’s book outlines similarities and differences between the past and present, foretelling a possible future.

Ahamed suggests that America needs to avoid a rigid monetary policy based on “who’s ox is gored”. Further, investment in technology needs to be reined in by reducing the hype about loss of jobs with a realistic judgement of employment impact and technologies’ benefits. Political and business leadership need more transparency and public oversight to improve societal decisions on technological investment. Investment opportunities need to be reasonably evaluated to avoid bubbles that distort capital flows. Ahamed suggests power brokers, whether private or public, need to avoid over reaction to inflation by being wary, but not overly punitive, toward investment in new technology.

Breadlines in the 1929 economic crash.
Ahamed offers several individual examples of con men who created hype-driven market manipulation that fueled 19th century fraud with over-optimism, and self-promotion based on new railroad building schemes. One listens to the methodology of these con men and will recall news articles today about technology fraudsters. Though only 3 to 4 percent of SpaceX shares are owned publicly, it reminds one of the over-optimism and self-promotion of Elon Musk. This is not to say Musk is a con man, but it reflects how over confidence in technology is similar to the over confidence in railway expansion in the 19th century. Additionally, search of the news of crypto scammers in the 21st century show there are three Thai suspects, 22 accused scammers in Palau, 82 accused scammers in Eswatini, and an astounding 15,260 suspects worldwide.
Liaquat Ahamed suggests the U.S. presidential elections are directly distorted by the financial crisis surrounding 1873. Ulysses Grant’s administration is undermined by the loss of public confidence in the federal government. The civil rights movement is stalled because northern voters were less willing to support federal intervention in the South. The Republican Party lost the political will to continue Reconstruction policies. Voters punished incumbents because of the economic crisis of the 1870s. Ahamed argues the economic collapse destabilized all governments and empowered reactionary forces that weakened government reforms. Conspiracy theories blossomed with scapegoating of all who had been elected to govern in the western world.

People are being arrested based on the color of their skin with the presumption that they are not citizens of America and are deported without legal recourse.
Today’s American government has stalled support of fundamental rights written in the Constitution. People are being arrested based on the color of their skin with the presumption that they are not citizens of America and should be deported. A majority of American voters elected a President who empowers the government to destabilize its relationship with former allies of democracy. Conspiracy theories abound on causes of global warming to support beliefs that it is a natural event that cannot be mitigated by reducing fossil fuel use and accelerating wind, water, and solar energy uses. Belief in a “deep state” conspiracy has created government and political distrust. QAnon like cabals have grown to spew allegations of secret wars being waged by special interests. Distrust of the United Nations is increasingly viewed as a body plotting to replace nation-state government. That view grows and feeds America’s “go it alone” belief as the only way to sustain democracy.

Where unemployment is created by new technology, America needs to support those who are displaced.
Despite Liaquat Ahamed’s argument that today’s America has similarities to America’s 19th century circumstances, he suggests there are reasons to believe 19th century mistakes can be avoided. Where unemployment is created by new technology, America needs to support those who are displaced. When faced with inflation and economic threat, rather than depending on singular leadership decisions, government should support flexible polices by the central banks of America. Public input to government decision-making is an essential strength of democracy. When public expertise is ignored, judgement is degraded and America becomes less democratic and more likely to fail.

Rothschild Family Tree
As one nears the end of Ahamed’s book, one wonders why the Rothchild’s are prominently noted in its subtitle. His point is that the Rothschilds were the only global financial institution that successfully survived the ups and downs of the banking industry in the 19th century. Their success influenced unjust anti-Semitic growth in the world. The Rothschilds embodied the tension between stability and speculation with their long-term stability as a lending institution. The Rothchild’s stability became a symbol of global finance that influenced political actions around the world. The price paid by the Rothchild families’ success fed the worst in human nature exemplified by the Holocaust of WWII.
No leader is infallible but those who listen and act on the basis of others expertise are more likely to make the right decisions. That is Ahamed’s solution to avoid economic depressions like those of 1873 and 1929. Proof of this opinion is in the financial crises of 2008 and the world’s recovery. This is not to argue that many citizens were not harmed and unfairly treated in the 2008 crisis, but the spread of a world economic collapse was avoided.



























































