The Ascent of Money_ A Financial History Part 9

65 Kaiser, 'Money', pp. 16, 20. Kaiser, 'Money', pp. 16, 20.

66 Ibid., p. 22. Ibid., p. 22.

67 Murphy, Murphy, John Law John Law, p. 235.

68 Ibid., p. 250. Ibid., p. 250.

69 Hyde, Hyde, Law Law, p. 159.

70 Schama, Schama, Embarra.s.sment of Riches Embarra.s.sment of Riches, pp. 366ff.

71 Ibid., pp. 367ff. Ibid., pp. 367ff.

72 For contrasting accounts see Neal, For contrasting accounts see Neal, Financial Capitalism Financial Capitalism, pp. 89- 117; Edward Chancellor, Devil Take the Hindmost: A History of Financial Speculation Devil Take the Hindmost: A History of Financial Speculation (London, 1999), pp. 58-95. (London, 1999), pp. 58-95.

73 Chancellor, Chancellor, Devil Take the Hindmost Devil Take the Hindmost, p. 64.

74 Ibid., p. 84. Ibid., p. 84.

75 Neal, Neal, Financial Capitalism Financial Capitalism, pp. 90, 111f. As Neal has observed, an investor who had bought South Sea stock at the beginning of 1720 and sold it at the end of the year, ignoring the intervening bubble, would still have realized a 56 per cent annual return.

76 Julian Hoppitt, 'The Myths of the South Sea Bubble', Julian Hoppitt, 'The Myths of the South Sea Bubble', Transactions of the Royal Historical Society Transactions of the Royal Historical Society, 12 (2002), pp. 141-65.

77 Tom Nicholas, 'Trouble with a Bubble', Harvard Business School Case N9-807-146 (28 February 2007), p. 1. Tom Nicholas, 'Trouble with a Bubble', Harvard Business School Case N9-807-146 (28 February 2007), p. 1.

78 William L. Silber, William L. Silber, When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy (Princeton, 2006). (Princeton, 2006).

79 Niall Ferguson, 'Political Risk and the International Bond Market between the 1848 Revolution and the Outbreak of the First World War', Niall Ferguson, 'Political Risk and the International Bond Market between the 1848 Revolution and the Outbreak of the First World War', Economic History Review Economic History Review, 59, 1 (February 2006), pp. 70- 112.

80 New York Times New York Times, 23 October 1929.

81 Nicholas, 'Trouble with a Bubble', p. 4. Nicholas, 'Trouble with a Bubble', p. 4.

82 Ibid., p. 6. Ibid., p. 6.

83 Chancellor, Chancellor, Devil Take the Hindmost Devil Take the Hindmost, pp. 199ff.

84 See Milton Friedman and Anna J. Schwartz, See Milton Friedman and Anna J. Schwartz, A Monetary History of the United States, 1867-1960 A Monetary History of the United States, 1867-1960 (Princeton, 1963), pp. 299-419. This chapter, 'The Great Contraction', should be required reading for all financial pract.i.tioners. (Princeton, 1963), pp. 299-419. This chapter, 'The Great Contraction', should be required reading for all financial pract.i.tioners.

85 Ibid., pp. 309f., n. 9. Anyone who reads this footnote will understand why the Fed moved so swiftly and open-handedly to ensure that JP Morgan bought Bear Stearns in March 2007. Ibid., pp. 309f., n. 9. Anyone who reads this footnote will understand why the Fed moved so swiftly and open-handedly to ensure that JP Morgan bought Bear Stearns in March 2007.

86 Ibid., p. 315. Ibid., p. 315.

87 Ibid., p. 317. Ibid., p. 317.

88 Ibid., p. 396. Ibid., p. 396.

89 Ibid., p. 325. Ibid., p. 325.

90 Ibid., p. 328. Ibid., p. 328.

91 US Department of Commerce Bureau of the Census, US Department of Commerce Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 Historical Statistics of the United States: Colonial Times to 1970 (Washington, DC, 1975), p. 1019. (Washington, DC, 1975), p. 1019.

92 Barry Eichengreen, Barry Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (New York / Oxford, 1992). See also (New York / Oxford, 1992). See also idem idem, 'The Origins and Nature of the Great Slump Revisited', Economic History Review Economic History Review, 45, 2 (May 1992), pp. 213-39.

93 See e.g. Ben S. Bernanke, 'The Macroeconomics of the Great Depression: A Comparative Approach', NBER Working Paper 4814 (August 1994). See e.g. Ben S. Bernanke, 'The Macroeconomics of the Great Depression: A Comparative Approach', NBER Working Paper 4814 (August 1994).

94 Hyman P. Minsky, 'Introduction: Can "It" Happen Again? A Reprise', in Hyman P. Minsky, 'Introduction: Can "It" Happen Again? A Reprise', in idem idem (ed.), (ed.), Inflation, Recession and Economic Policy Inflation, Recession and Economic Policy (Brighton, 1982), p. xi. (Brighton, 1982), p. xi.

95 The index has fallen by 10 per cent or more in 23 out of 113 years. The index has fallen by 10 per cent or more in 23 out of 113 years.

96 See Nicholas Brady, James C. Cotting, Robert G. Kirby, John R. Opel and Howard M. Stein, See Nicholas Brady, James C. Cotting, Robert G. Kirby, John R. Opel and Howard M. Stein, Report of the Presidential Task Force on Market Mechanisms, submitted to the President of the United States, the Secretary of the Treasury and the Chairman of the Federal Reserve Board Report of the Presidential Task Force on Market Mechanisms, submitted to the President of the United States, the Secretary of the Treasury and the Chairman of the Federal Reserve Board (Washington, DC, January 1988). Of especial interest to the historian is the comparison with 1929: see Appendix VIII, pp. 1-13. (Washington, DC, January 1988). Of especial interest to the historian is the comparison with 1929: see Appendix VIII, pp. 1-13.

97 James Dale Davidson and William Rees-Mogg, James Dale Davidson and William Rees-Mogg, The Great Reckoning: How the World Will Change in the Depression of the 1990's The Great Reckoning: How the World Will Change in the Depression of the 1990's (London, 1991). (London, 1991).

98 For Greenspan's own version of events, see Alan Greenspan, For Greenspan's own version of events, see Alan Greenspan, The Age of Turbulence: Adventures in a New World The Age of Turbulence: Adventures in a New World (New York, 2007), pp. 100-110. (New York, 2007), pp. 100-110.

99 Greenspan, Greenspan, Age of Turbulence Age of Turbulence, p. 166.

100 Ibid., p. 167. Ibid., p. 167.

101 Ibid., pp. 190-5. Ibid., pp. 190-5.

102 Ibid., pp. 200f. Ibid., pp. 200f.

103 The best account remains Bethany McLean and Peter Elkind, The best account remains Bethany McLean and Peter Elkind, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (New York, 2003). (New York, 2003).

104 Ibid., p. 55. Ibid., p. 55.

105 See her own account of events in Mimi Swartz and Sherron Watkins, See her own account of events in Mimi Swartz and Sherron Watkins, Power Failure: The Inside Story of the Collapse of Enron Power Failure: The Inside Story of the Collapse of Enron (New York, 2003). (New York, 2003).

4. The Return of Risk 1 Rawle O. King, 'Hurricane Katrina: Insurance Losses and National Capacities for Financing Disaster Risks', Congressional Research Service Report for Congress, 31 January 2008, table 1. Rawle O. King, 'Hurricane Katrina: Insurance Losses and National Capacities for Financing Disaster Risks', Congressional Research Service Report for Congress, 31 January 2008, table 1.

2 Joseph B. Treaster, 'A Lawyer Like a Hurricane: Facing Off Against Asbestos, Tobacco and Now Home Insurers', Joseph B. Treaster, 'A Lawyer Like a Hurricane: Facing Off Against Asbestos, Tobacco and Now Home Insurers', New York Times New York Times, 16 March 2007.

3 For details, see Richard F. Scruggs, 'Hurricane Katrina: Issues and Observations', American Enterprise Inst.i.tute-Brookings Judicial Symposium, 'Insurance and Risk Allocation in America: Economics, Law and Regulation', Georgetown Law Center, 20-22 September 2006. For details, see Richard F. Scruggs, 'Hurricane Katrina: Issues and Observations', American Enterprise Inst.i.tute-Brookings Judicial Symposium, 'Insurance and Risk Allocation in America: Economics, Law and Regulation', Georgetown Law Center, 20-22 September 2006.

4 Details from Details from http://www.usa.gov/Citizen/Topics/PublicSafety/Hurricane_Katrina_Recovery.shtml, http://katrina.louisiana.gov/index. html and and http://www.ldi.state.la.us/HurricaneKatrina.htm.

5 Peter Lattman, 'Plaintiffs Laywer Scruggs is Indicted on Bribery Charges', Peter Lattman, 'Plaintiffs Laywer Scruggs is Indicted on Bribery Charges', Wall Street Journal Wall Street Journal, 29 November 2007; Ashby Jones and Paulo Prada, 'Richard Scruggs Pleads Guilty', ibid., 15 March 2008.

6 King, 'Hurricane Katrina', p. 4. King, 'Hurricane Katrina', p. 4.

7 Naomi Klein, Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism The Shock Doctrine: The Rise of Disaster Capitalism (New York, 2007). (New York, 2007).

8 http://www.nhc.noaa.gov/pastdec.shtml.

9 John Schwartz, 'One Billion Dollars Later, New Orleans is Still at Risk', John Schwartz, 'One Billion Dollars Later, New Orleans is Still at Risk', New York Times New York Times, 17 August 2007.

10 Michael Lewis, 'In Nature's Casino', Michael Lewis, 'In Nature's Casino', New York Times Magazine New York Times Magazine, 26 August 2007.

11 National Safety Council, 'What are the Odds of Dying?': National Safety Council, 'What are the Odds of Dying?': http:// http:// www.nsc.org/lrs/statinfo/odds.htm. For the cancer statistic, see the National Cancer Inst.i.tute, 'SEER Cancer Statistics Review, 1975- 2004', table I-17: http://srab.cancer.gov./devcan/. The precise lifetime probability of dying from cancer in the United States between 2002 and 2004 was 21.29 per cent, with a 95 per cent confidence interval.

12 Florence Edler de Roover, 'Early Examples of Marine Insurance', Florence Edler de Roover, 'Early Examples of Marine Insurance', Journal of Economic History Journal of Economic History, 5, 2 (November 1945), pp. 172-200.

13 Ibid., pp. 188f. Ibid., pp. 188f.

14 A. H. John, 'The London a.s.surance Company and the Marine Insurance Market of the Eighteenth Century', A. H. John, 'The London a.s.surance Company and the Marine Insurance Market of the Eighteenth Century', Economica Economica, New Series, 25, 98 (May 1958), p. 130.

15 Paul A. Papayoanou, 'Interdependence, Inst.i.tutions, and the Balance of Power', Paul A. Papayoanou, 'Interdependence, Inst.i.tutions, and the Balance of Power', International Security International Security, 20, 4 (Spring 1996), p. 55.

16 Roover, 'Early Examples of Marine Insurance', p. 196. Roover, 'Early Examples of Marine Insurance', p. 196.

17 M. Greenwood, 'The First Life Table', M. Greenwood, 'The First Life Table', Notes and Records of the Royal Society of London Notes and Records of the Royal Society of London, 1, 2 (October 1938), pp. 70-2.

18 The preceding paragraph owes a great debt to Peter L. Bernstein, The preceding paragraph owes a great debt to Peter L. Bernstein, Against the G.o.ds: The Remarkable Story of Risk Against the G.o.ds: The Remarkable Story of Risk (New York, 1996). (New York, 1996).

19 Gregory Clark, Gregory Clark, A Farewell to Alms: A Brief Economic History of the World A Farewell to Alms: A Brief Economic History of the World (Princeton, 2007). (Princeton, 2007).

20 See the essays in A. Ian Dunlop (ed.), See the essays in A. Ian Dunlop (ed.), The Scottish Ministers' Widows' Fund, 1743-1993 The Scottish Ministers' Widows' Fund, 1743-1993 (Edinburgh, 1992) for details. (Edinburgh, 1992) for details.

21 The key doc.u.ments are to be found in the Robert Wallace papers, National Archives of Scotland: CH/9/17/6-13. The key doc.u.ments are to be found in the Robert Wallace papers, National Archives of Scotland: CH/9/17/6-13.

22 G. W. Richmond, 'Insurance Tendencies in England', G. W. Richmond, 'Insurance Tendencies in England', Annals of the American Academy of Political and Social Science Annals of the American Academy of Political and Social Science, 161 (May 1932), p. 183.

23 A. N. Wilson, A. N. Wilson, A Life of Walter Scott: The Laird of Abbotsford A Life of Walter Scott: The Laird of Abbotsford (London: Pimlico, 2002), pp. 169-71. (London: Pimlico, 2002), pp. 169-71.

24 G. Clayton and W. T. Osborne, 'Insurance Companies and the Finance of Industry', G. Clayton and W. T. Osborne, 'Insurance Companies and the Finance of Industry', Oxford Economic Papers Oxford Economic Papers, New Series, 10, 1 (February 1958), pp. 84-97.

25 'American Exceptionalism', 'American Exceptionalism', Economist Economist, 10 August 2006.

26 http://www.workhouses.org.uk/index.html?StMarylebone/ StMarylebone.shtml StMarylebone.shtml.

27 Lothar Gall, Lothar Gall, Bismarck: The White Revolutionary Bismarck: The White Revolutionary, vol. II: 1879- 1898 1879- 1898, trans. J. A. Underwood (London, 1986), p. 129.

28 H. G. Lay, H. G. Lay, Marine Insurance: A Text Book of the History of Marine Insurance, including the Functions of Lloyd's Register of Shipping Marine Insurance: A Text Book of the History of Marine Insurance, including the Functions of Lloyd's Register of Shipping (London, 1925), p. 137. (London, 1925), p. 137.

29 Richard Sicotte, 'Economic Crisis and Political Response: The Political Economy of the Shipping Act of 1916', Richard Sicotte, 'Economic Crisis and Political Response: The Political Economy of the Shipping Act of 1916', Journal of Economic History Journal of Economic History, 59, 4 (December 1999), pp. 861-84.

30 Anon., 'Allocation of Risk between Marine and War Insurer', Anon., 'Allocation of Risk between Marine and War Insurer', Yale Law Journal Yale Law Journal, 51, 4 (February 1942), p. 674; C., 'War Risks in Marine Insurance', Modern Law Review Modern Law Review, 10, 2 (April 1947), pp. 211-14.

31 Alfred T. Lauterbach, 'Economic Demobilization in Great Britain after the First World War', Alfred T. Lauterbach, 'Economic Demobilization in Great Britain after the First World War', Political Science Quarterly Political Science Quarterly, 57, 3 (September 1942), pp. 376-93.

32 Correlli Barnett, Correlli Barnett, The Audit of War The Audit of War (London, 2001), pp. 31f. (London, 2001), pp. 31f.

33 Richmond, 'Insurance Tendencies', p. 185. Richmond, 'Insurance Tendencies', p. 185.

34 Charles Davison, 'The j.a.panese Earthquake of 1 September', Charles Davison, 'The j.a.panese Earthquake of 1 September', Geographical Journal Geographical Journal, 65, 1 (January 1925), pp. 42f.

35 Yoshimichi Miura, 'Insurance Tendencies in j.a.pan', Yoshimichi Miura, 'Insurance Tendencies in j.a.pan', Annals of the American Academy of Political and Social Science Annals of the American Academy of Political and Social Science, 161 (May 1932), pp. 215-19.

36 Herbert H. Gowen, 'Living Conditions in j.a.pan', Herbert H. Gowen, 'Living Conditions in j.a.pan', Annals of the American Academy of Political and Social Science Annals of the American Academy of Political and Social Science, 122 (November 1925), p. 163.

37 Kenneth Hewitt, 'Place Annihilation: Area Bombing and the Fate of Urban Places', Kenneth Hewitt, 'Place Annihilation: Area Bombing and the Fate of Urban Places', Annals of the a.s.sociation of American Geographers Annals of the a.s.sociation of American Geographers, 73 (1983), p. 263.

38 Anon., 'War Damage Insurance', Anon., 'War Damage Insurance', Yale Law Journal Yale Law Journal, 51, 7 (May 1942), pp. 1160-1. It made $210 million, having collected premiums from 8 million policies and paid out only a modest amount.

39 Kingo Tamai, 'Development of Social Security in j.a.pan', in Misa Izuhara (ed.), Kingo Tamai, 'Development of Social Security in j.a.pan', in Misa Izuhara (ed.), Comparing Social Policies: Exploring New Perspectives in Britain and j.a.pan Comparing Social Policies: Exploring New Perspectives in Britain and j.a.pan (Bristol, 2003), pp. 35-48. See also Gregory J. Kasza, 'War and Welfare Policy in j.a.pan', (Bristol, 2003), pp. 35-48. See also Gregory J. Kasza, 'War and Welfare Policy in j.a.pan', Journal of Asian Studies Journal of Asian Studies, 61, 2 (May 2002), p. 428.

40 Recommendation of the Council of Social Security System (1950). Recommendation of the Council of Social Security System (1950).

41 W. Macmahon Ball, 'Reflections on j.a.pan', W. Macmahon Ball, 'Reflections on j.a.pan', Pacific Affairs Pacific Affairs, 21, 1 (March 1948), pp. 15f.

42 Beatrice G. Reubens, 'Social Legislation in j.a.pan', Beatrice G. Reubens, 'Social Legislation in j.a.pan', Far Eastern Survey Far Eastern Survey , 18, 23 (16 November 1949), p. 270. , 18, 23 (16 November 1949), p. 270.

43 Keith L. Nelson, 'The "Warfare State": History of a Concept', Keith L. Nelson, 'The "Warfare State": History of a Concept', Pacific Historical Review Pacific Historical Review, 40, 2 (May 1971), pp. 138f.

44 Kasza, 'War and Welfare Policy', pp. 418f. Kasza, 'War and Welfare Policy', pp. 418f.

45 Ibid., p. 423. Ibid., p. 423.

46 Ibid., p. 424. Ibid., p. 424.

47 Nakagawa Yatsuhiro, 'j.a.pan, the Welfare Super-Power', Nakagawa Yatsuhiro, 'j.a.pan, the Welfare Super-Power', Journal of j.a.panese Studies Journal of j.a.panese Studies, 5, 1 (Winter 1979), pp. 5-51.

48 Ibid., p. 21. Ibid., p. 21.

49 Ibid., p. 9. Ibid., p. 9.

50 Ibid., p. 18. Ibid., p. 18.

51 For comparative studies, see Gregory J. Kasza, For comparative studies, see Gregory J. Kasza, One World of Welfare: j.a.pan in Comparative Perspective One World of Welfare: j.a.pan in Comparative Perspective (Ithaca, 2006) and Neil Gilbert and Ailee Moon, 'a.n.a.lyzing Welfare Effort: An Appraisal of Comparative Methods', (Ithaca, 2006) and Neil Gilbert and Ailee Moon, 'a.n.a.lyzing Welfare Effort: An Appraisal of Comparative Methods', Journal of Policy a.n.a.lysis and Management Journal of Policy a.n.a.lysis and Management, 7, 2 (Winter 1988), pp. 326-40.

52 Kasza, Kasza, One World of Welfare One World of Welfare, p. 107.

53 Peter H. Lindert, Peter H. Lindert, Growing Public: Social Spending and Economic Growth since the Eighteenth Century Growing Public: Social Spending and Economic Growth since the Eighteenth Century (Cambridge, 2004), vol. I, table I.2. (Cambridge, 2004), vol. I, table I.2.

54 Hiroto Tsukada, Hiroto Tsukada, Economic Globalization and the Citizens' Welfare State Economic Globalization and the Citizens' Welfare State (Aldershot / Burlington / Singapore / Sydney, 2002), p. 96. (Aldershot / Burlington / Singapore / Sydney, 2002), p. 96.

55 Milton Friedman and Anna J. Schwartz, Milton Friedman and Anna J. Schwartz, A Monetary History of the United States, 1867-1960 A Monetary History of the United States, 1867-1960 (Princeton, 1963). (Princeton, 1963).

56 Milton Friedman and Rose D. Friedman, Milton Friedman and Rose D. Friedman, Two Lucky People: Memoirs Two Lucky People: Memoirs (Chicago / London, 1998), p. 399. (Chicago / London, 1998), p. 399.

57 Ibid., p. 400. Ibid., p. 400.

58 Ibid., p. 593. Ibid., p. 593.