Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Nber Series on Long-Term Factors in Economic Development) [Paperback]

Barry Eichengreen (Author)

Book Description

Publication Date: February 8, 1996 | ISBN-10: 0195101138 | ISBN-13: 978-0195101133

This book offers a reassessment of the international monetary problems that led to the global economic crisis of the 1930s. It explores the connections between the gold standard--the framework regulating international monetary affairs until 1931--and the Great Depression that broke out in 1929. Eichengreen shows how economic policies, in conjunction with the imbalances created by World War I, gave rise to the global crisis of the 1930s. He demonstrates that the gold standard fundamentally constrained the economic policies that were pursued and that it was largely responsible for creating the unstable economic environment on which those policies acted. The book also provides a valuable perspective on the economic policies of the post-World War II period and their consequences.

Editorial Reviews

Review

"A brilliant new book."--Newsweek

"Very highly recommended."--Choice

"Important and convincingly argued....Even those who are not sympathetic to the arguments and conclusions of this book will agree that it is destined to be an important work for all future students of the gold standard."--Journal of Economic Issues

"An important book....There is no doubt...that economists and economic historians are in Eichengreen's debt. This is a fine book which supercedes all the literature in the field. Money has been devalued in some recent surveys of the international depression of the 1930s. Eichengreen has brought it back to the center of the story, which is where it belongs."--Economica

"Eichengreen has produced an excellent economic history of the interwar years which will be read with great interest by all students of the period. His account of the gold standard during this dramatic period is based on wide ranging research and is exceptional in its clarity....This volume will remain the standard history of the gold standard for many years to come."--Times Higher Education Supplement

"A tour de force, by the outstanding contemporary scholar of the 20th century history of the international monetary system."--John Williamson, Senior Fellow, Institute for International Economics

"This stimulating book is notable for its integration of political and economic analysis in helping us to understand the weakneses of the gold standard in the interwar period."--Journal of Interdisciplinary History

"[Golden Fetters] may become a standard reference for years to come."--Research Reports, American Institute for Economic Research

"Golden Fetters compels us to reexamine familiar ideas about economic pathology in the interwar period and the way the gold standard functioned before the First World War. Eichengreen offers us new views of old problems. This is the most important contribution to the subject since the works of Brown and Nurkse, more than four decades ago."--Peter B. Kenen, Houblon-Kenen Fellow, Bank of England

"Eichengreen illuminates the role of the gold standard in his masterly analysis of the global economic and political forces that produced the Great Depression and economic recovery after 1933."--Anna J. Schwartz, National Bureau of Economic Research

"A major reinterpretation of the Great Depression, from the perspective of the world political economy. Golden Fetters is 'must reading' for students of international political economy."--Robert O. Keohane, Harvard University

"Eichengreen has succeeded in providing a rare blend of well-balanced economic and historical analyses. The result is new interpretation of the policy failures that led to the Great Depression: the lack of international cooperation features as a prominent cause of economic instability. There is no doubt in my mind that historians will see Golden Fetters as the standard work on the subject for years to come."--Gianni Toniolo, Dipartimente Economische Venezia

"Eichengreen's book provides new and insightful analyses of how the gold standard worked and its role in the economic crisis of the interwar years."--David Hale, Chief Economist and Senior Vice President, Kemper Finanacial Corporation

"In this brilliant and synthetic new book, Barry Eichengreen has gone well beyond his previous work to marshal a powerful indictment of the interwar gold standard, and of the political leaders and economic policy-makers who allowed themselves to be bound by golden fetters while the world economy collapsed."--Journal of Monetary Economics

"Anyone tempted to make historical parallels beteen the EMS and the gold standard should read Barry Eichengreen's scholarly account....His book is written with a clarity that allows one to identify both elements of the gold standard that were unique and those that are common to any regime of fixed exchange rates."--The London Times Literary Supplement

"I agree with Robert J. Samuelson (Newsweek) that Barry Eichengreen's Golden Fetters...is "a brilliant new book."...Eichengreen has done nearly the impossible. He writes successfully both for "the elusive general reader" (p. xiii) and for the specialist historian. Anyone who reads The Wall Street Journal should be able to understand and appreciate his book."--Business History Review

"This major work provides a striking reinterpretation of the role of the gold standard in the international economy during the interwar years."--The Historian

"This new international history of the inter-war gold standard, which will quickly become the standard work...succeeds at a number of levels. First, it is superbly written and achieves its objective of being accessible to the general reader. Secondly, it shows how national histories can be knitted together into a coherent analysis of an international economic crisis, thereby furthering the cause of comparative economic history....An excellent book...quite compelling reading."--Business History

"It is superb monetary history....The great strength of Eichengreen's historical analysis is his enormously wide knowledge of, and sympathy for, economic and political conditions in all the major countries concerned...a marvelous book. It is, in addition, beautifully written, and fully accessible to general readers....A real pleasure to read, the work of a master economic historian."--International Journal of Finance and Economics

"[The book] represents the definitive statement of a vastly prolific scholar. Graciously written, impressively researched, organized...with a large interdisciplinary audience in mind, [it] bids fair to be the classic contribution on its subject, a veritable tour de force."--Labor History

"Breaks new ground while addressing the overtilled terrain of the interwar period...highly readable. [The book] skillfully integrates the findings of many technical arguments, sacrificing neither rigor nor clarity. It is also impressive in scope, providing a broad overview of the interwar international economy."--Merson International Studies Review

About the Author

Barry Eichengreen is the John L. Simpson Professor of Economics and Professor of Political Science at the University of California at Berkeley, and Research Associate of the National Bureau of Economic Research. He has written a number of books on international monetary issues and economic history, including Elusive Stability: Essays in the History of International Finance (1990).

Product Details

• Paperback: 480 pages
• Publisher: Oxford University Press, USA (February 8, 1996)
• Language: English
• ISBN-10: 0195101138
• ISBN-13: 978-0195101133
• Product Dimensions: 5.9 x 1.4 x 9.1 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #386,459 in Books (See Top 100 in Books)

More About the Author

Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, NBER Research Associate, and CEPR Research Fellow. He was formerly Senior Policy Advisor at the International Monetary Fund (Washington, D.C.), fellow of the Center for Advanced Studies in the Behavioral Sciences (Palo Alto), and fellow at the Institute for Advanced Study (Berlin). He is a fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations. He writes a monthly column for Project Syndicate and periodic columns for Estadao Sao Paulo (Brazil), Finanz und Wirtschaft (Switzerland), Handelsblatt (Germany), and Eurointelligence (in Europe). He is past president of the Economic History Association, winner of the Schumpeter Prize of the International Schumpeter Society. and has been named one of the 100 most important public intellectuals by Foreign Policy Magazine. You can follow his tweets at [e-mail].

Most Helpful Customer Reviews

70 of 71 people found the following review helpful

5.0 out of 5 stars A tremendous trip into la-la land August 1, 2001

By M. Mcfarland

Format:Paperback

Barry Eichengreen's classic tale of financial hubris and mismanagement is almost ten years old. But it's still riveting. It's a broad-sweep introduction for generalists and financial buffs alike. And it's very well written too.

The book begins by describing the inner workings of the gold standard and how it evolved from its inception in the 1800s. This part may be a bit dry for generalists, but once underway all the terms become quite easy to understand. It's worth persevering since WW1changed the way the world worked. In particular, the after effects of the war made staying on gold much more difficult for countries experiencing persistent balance of payments deficits.

After that, Eichengreen goes on a tour of the interwar years and aims to show why the collapse of the gold standard and the plunge into depression had nothing to do with the US stock market and everything to do with rivalries and mismanagment on an international scale. The US crash was a symptom of an international crisis, not the cause.

All the classic powderkegs are there. The UK's mindless attempt to rejoin the gold standard at the overvalued, pre-war rate. Vindictive French domestic politics and the hyperinflations in continental Europe. Vindictive French attempts to humiliate the Germans over reparations. Bank runs in Germany and Austria. French and American attempts to bend the rules of the Gold Standard for their own national interests. Wild swings in capital flows from Europe to the US and back again. And the cataclysmic days of 1931 when the whole system collapsed under the weight of banking crises and currency contagion - in ways very similar to Asia in 1997.

After the crash, we get down to the Great Depression and who fared the best. This part is much shorter since it isn't as complicated. Basically, those countries that devalued quickly and went the free market route fared much better than those that didn't. Sweden was a star performer. The US can be found towards the back of the class. Dear old Blighty gets full marks for going solo, although more recent evidence shows this had more to do with throwing in the towel than playing with new ideas.

Strangely there's little mention of Japan. Nippon took a beating in the late 1920s while the yen remained fixed to gold. Once sterling devalued, the Japanese followed suit. The recovery was swift and full blooded. But the central bank forgot to stop the printing press once growth returned and ended up fighting hyperinflation in the late 1930s. So Eichengreen's line that giving up was the great panacea isn't quite as true as he'd have you believe.

All told, Golden Fetters is great. While it lacks facts and figures on banking problems and doesn't really provide convincing evidence on contagion, it works really well as a diary of contrasting fortunes in Europe and the US after the guns fell silent in 1918. If you like history then this is for you.

27 of 33 people found the following review helpful

5.0 out of 5 stars Excellent reading! April 11, 2000

By A Customer

Format:Paperback

Eichengreen does it again. His easy-reading prose takes the reader through the monetary meanders of the post-WWI scenario, alternating historical narrative with clear, in-depth looks into economic theory and economic thought. The book features a comprehensive analysis of the intricacies of the interwar gold standard. The international conferences, the German hyperinflation, the roller-coaster of the Franc between 1924 and 1926 and the monetary determinants of the Great Depression are studied with extreme accuracy. This magnificient account will not disappoint either the academic reader or the learned non-specialist.

25 of 32 people found the following review helpful

5.0 out of 5 stars A Landmark Economics Study on the Economics of the Flawed Gold Standard July 13, 2007

By T. Carlsen

Format:Paperback

This is a landmark, masterpiece economics study of the Great Depression and the effects of the disastrous gold standard in partly causing the Great Depression, along with the Federal Reserve contracting the money supply, related to the flawed gold standard. The data shows how the gold standard strangled the money supply, how countries that abandoned the gold standard first recovered first and the ones that stayed longer recovered later. This is the most important analysis yet of the causes and severity of the Great depression. This book is intended for advanced students of this subject and is probably not for casual reading.

Other essential books on the subject of the Great Depression economics are Essays on the Great Depression by Ben Bernanke, Chairman of the Federal Reserve and a scholar of Great Depression economics, and Lessons from the Great Depression (Lionel Robbins Lectures) by Peter Temin, one of the leading early economists of the Great Depression (before Golden Fetters advanced the understanding further). Those books were also written for those able to grasp economics, although they can be read by average people if you focus on the conclusions and not the data leading to that.

The average reader wanting to read about the gold standard in a way that a general reader can understand should read the Pulitzer Prize-winning Freedom from Fear: The American People in Depression and War, 1929-1945 (Oxford History of the United States) by David Kennedy. Kennedy's writes thoroughly about the economics of the Great Depression, yet the Oxford History of the United States is designed for everyone to read.

UPDATE: The Pulitzer Prize was awarded to the outstanding Lords of Finance: The Bankers Who Broke the World, which explains the history leading to Great Depression.