1873
The Rothschilds, the First Great Depression, and the Making of the Modern World
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- $18.99
Publisher Description
“A lively and compelling account . . . The cumulative effect is impressive. . . . Ahamed tells his story with an easy fluency and a high velocity.” —The New York Times Book Review
“Superb . . . Ahamed thrillingly brings back to life a boom not unlike today's . . . In the process, he illuminates new ways of thinking about finance.” —Financial Times
Named a Most Anticipated Book of 2026 by Literary Hub
From the author of the Pulitzer Prize–winning Lords of Finance, a magnificent and timely reckoning with the first truly global financial calamity and the famous banking family at the center of the whirlwind
Over the course of the 1850s and 1860s, during the first era of globalization, the world experienced an unprecedented economic boom. Fueling this expansion was an explosion in the global bond market, at the hub of which stood one family—the Rothschilds, arguably the wealthiest banking family in history. While the giant sums of capital provided through the bond market built the railroads, the century’s most transformative investments, the money raised also unleashed a frenzy of speculation, massive overinvestment, and wasteful borrowing by governments.
With excessive euphoria leading to disappointed expectations, in the early 1870s the bubble burst. Stock markets from Vienna to New York crashed, and dozens of railroads and many governments defaulted. Financial officials responded by blundering into a precipitous remaking of the global currency system—exacerbating the ensuing economic collapse and setting the stage for decades of a punitive deflation that sparked waves of anti-globalist populism. As Liaquat Ahamed shows us in this enthralling history, the crisis of 1873 was, among other things, a death blow to Reconstruction in the United States and the proximate cause of the Ottoman Empire’s slow death spiral. Ironically, though the Rothschilds had presciently kept a low profile during the bubble, when the deluge came, they were viciously scapegoated as part of a wider hatred directed at “Jewish finance,” a strain of antisemitism that would come to full evil flower during the twentieth century.
1873 is a bird’s-eye reckoning with the full dimension of the crisis, from its buildup to its long aftermath. The Rothschilds and a cast of other witnesses give us the human perspective. And we have a brilliant financial historian’s grasp of the larger forces at play, resulting in a global narrative with thrilling explanatory power.
APPLE BOOKS REVIEW
Armed with the gift of perspective, financial historian Liaquat Ahamed mines a 19th-century economic crisis for insights that still resonate. As the modern global economy emerged, an upstart family, the Rothschilds, founded banks that literally shaped the world. But even those astute European financiers couldn’t stop a great depression. Ahamed lays out a litany of key factors that led to that crisis, including bond market abuses, speculation mania among investors, an artificially inflated housing market, and clueless politicians. Beyond being a harbinger for future crises, the crystallization of antisemitism in Europe and concessions to ex-Confederate Southern states in the U.S. in the aftermath of this depression lit the fuse on coming 20th century horrors. Ahamed pays particular attention to how a near-universal switch to the gold standard prolonged the suffering. The lesson of 1873 is that while many things change over a century and a half, some things seemingly never do.
PUBLISHERS WEEKLY
Pulitzer-winning economist Ahamed (Lords of Finance) offers an eye-opening investigation of the "first truly significant global financial crisis." In 1873, the Vienna Stock Exchange, inflated by a speculative real estate bubble, collapsed, affecting "people from every stratum of society." Soon a "preeminent American investment bank... shuttered its doors," inspiring runs on banks and further panic-selling. The period of global economic malaise that followed was the first to be referred to as the "Great Depression," and Ahamed notes that "it is remarkable" how it seems to have set the mold for future crashes. Moreover, while the 1873 crash is "now largely forgotten," its reverberations, he argues, were immense. The crisis led to "a giant redistribution of wealth" from "debtors to creditors," as "bankers and financiers" profited "inordinately." This provoked a general mood of "populist ire." Around the world, "politics took a darker turn." In the U.S., the Grant administration's ineffectual response played a role in "prematurely ending Reconstruction." In Europe, "novice investors who had lost their savings" sought scapegoats, and "increasingly directed their anger against Jews." Meanwhile, government debt defaults in the Middle East caused turmoil. Throughout, Ahamed returns to the Rothschilds, owners of "the largest... private European bank," using their central placement in the events that unfolded as "a natural connective thread." Granular and deeply researched, it's an essential new perspective on the link between capitalism's boom and bust cycles and the emergence of reactionary political movements.
