Book contents
- Frontmatter
- Contents
- List of figures
- List of boxes
- List of tables
- Preface
- 1 Introduction
- 2 Distant beginnings: the first 3,000 years
- 3 The Italians invent modern finance
- 4 The rise of international financial capitalism: the seventeenth century
- 5 The “Big Bang” of financial capitalism: financing and re-financing the Mississippi and South Sea Companies, 1688–1720
- 6 The rise and spread of financial capitalism, 1720–1789
- 7 Financial innovations during the “birth of the modern,” 1789–1830: a tale of three revolutions
- 8 British recovery and attempts to imitate in the US, France, and Germany, 1825–1850
- 9 Financial globalization takes off: the spread of sterling and the rise of the gold standard, 1848–1879
- 10 The first global financial market and the classical gold standard, 1880–1914
- 11 The Thirty Years War and the disruption of international finance, 1914–1944
- 12 The Bretton Woods era and the re-emergence of global finance, 1945–1973
- 13 From turmoil to the “Great Moderation,” 1973–2007
- 14 The sub-prime crisis and the aftermath, 2007–2014
- References
- Index
9 - Financial globalization takes off: the spread of sterling and the rise of the gold standard, 1848–1879
Published online by Cambridge University Press: 05 October 2015
- Frontmatter
- Contents
- List of figures
- List of boxes
- List of tables
- Preface
- 1 Introduction
- 2 Distant beginnings: the first 3,000 years
- 3 The Italians invent modern finance
- 4 The rise of international financial capitalism: the seventeenth century
- 5 The “Big Bang” of financial capitalism: financing and re-financing the Mississippi and South Sea Companies, 1688–1720
- 6 The rise and spread of financial capitalism, 1720–1789
- 7 Financial innovations during the “birth of the modern,” 1789–1830: a tale of three revolutions
- 8 British recovery and attempts to imitate in the US, France, and Germany, 1825–1850
- 9 Financial globalization takes off: the spread of sterling and the rise of the gold standard, 1848–1879
- 10 The first global financial market and the classical gold standard, 1880–1914
- 11 The Thirty Years War and the disruption of international finance, 1914–1944
- 12 The Bretton Woods era and the re-emergence of global finance, 1945–1973
- 13 From turmoil to the “Great Moderation,” 1973–2007
- 14 The sub-prime crisis and the aftermath, 2007–2014
- References
- Index
Summary
With hindsight, economic historians now acknowledge that 1848 divides the economic and financial history of the world into separate epochs. Before 1848, international trade was rising faster than ever before and was connecting all regions of the world into new patterns of trade. But it was only after 1848 that enough price competition arose for the same international commodities around the world that a truly global market emerged (O'Rourke and Williamson 1999; Williamson 2011). Financial innovations appeared hand in hand with the revolutionary adoption of steam power for both land and water transport systems combined with the new information technology of the telegraph. The exclamations made in the 1850 edition of Fortune's Epitome of the Stocks and Public Funds about the rise of securities marketed on the London Stock Exchange over the 1840s, dominated by the railroad booms in Britain and the US, were modest compared to the ecstatic remarks made by his successor, R. L. Nash, in the 1876 edition of Fenn's Compendium of the English and Foreign Funds:
Upon this question of indebtedness hangs a world of vitality and progress with which the future well-being of mankind is signally identified; and it would be a very narrow view of a very mighty question if we could regard it in any other light. Humanly speaking, we are only at the commencement of a new era … [T]here can be no question – that with this modernized system of credit the world has acquired light, health, progress, and prosperity; that every man has more of the world's goods than could have been boasted of a century ago; that every man is better educated; that every man is a better citizen; and that if these are the results of indebtedness, we may fairly leave the solution of the problem to the future with that confidence which experience well earned amply justifies.
(Nash 1876, p. xiv)Essential features of the international crises, 1847–1849
The financial crisis of 1847 helped initiate a number of far-reaching policy changes in Britain especially, and then in Europe generally, with repercussions that were even more important in the future for the rest of the world as modern capitalism spread globally.
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- Chapter
- Information
- A Concise History of International FinanceFrom Babylon to Bernanke, pp. 190 - 209Publisher: Cambridge University PressPrint publication year: 2015