Economic Disasters of the Twentieth Century

Economic Disasters of the Twentieth Century

Edited by Michael J. Oliver and Derek H. Aldcroft

The First and Second World Wars, the great depression, oil shocks, inflation, financial crises, stock market crashes, the collapse of the Soviet command economy and Third World disasters are discussed in this comprehensive book. The contributors subject these disasters to in-depth assessment, carefully considering their costs and impact on specific countries and regions, as well as assessing them in a global context. The book examines the legacy of economic disasters and asks whether economic disasters are avoidable or whether policymakers can learn from their mistakes.

Chapter 1: ‘Destruction. . . and Misery’: The First World War

John Singleton

Subjects: economics and finance, economic psychology, financial economics and regulation, money and banking


1. ‘Destruction . . . and misery’: the First World War1 John Singleton During the winter of 1918–19, before Nature had cast her ameliorating mantle, the horror and desolation of war was made visible to sight on an extraordinary scale of blasted grandeur. The completeness of the destruction was evident. For mile after mile nothing was left. No building was habitable and no field fit for the plough. (John Maynard Keynes, quoted in Moggridge 1992, 286) The First World War (1914–18), fought between the Allies, led by France and Britain, and the Central Powers, led by Germany, was the worst humanmade catastrophe of the early twentieth century. As the distinguished Austrian economist, Ludwig von Mises, noted in 1919, ‘not too much economic insight is needed to recognize that a war means . . . destruction of goods and misery’ (von Mises 1983, 153). The ‘Great War’ brought death and destruction to Europe on a scale absent for centuries, though its impact on the rest of the world was relatively muted. This chapter is primarily concerned with the immediate impact of the war on individuals, property, industrial and agricultural output, national income, technology and so on. It also examines the controversy over the degree to which the war was responsible for the economic problems of the 1920s and early 1930s, including hyperinflation, deflation and the dislocation of the international monetary system. We shall constantly keep in mind that events that are disastrous for some groups and individuals may not be disastrous for others....

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