The best history books about why today’s financial world is the way it is

Diana B. Henriques Author Of A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History
By Diana B. Henriques

The Books I Picked & Why

The Great Wave: Price Revolutions and the Rhythm of History

By David Hackett Fischer

Book cover of The Great Wave: Price Revolutions and the Rhythm of History

Why this book?

It may seem odd to apply the word “thrilling” to an account of price movements through history. But for me, this book was one exciting “Aha!” moment after another. Fischer is a wonderful, whimsical writer, but he is also a brilliant historian who sees how the rhythms of the human economy – buying, selling, saving, spending – shape both the future and our understanding of the past. A truly surprising, brilliant book!  


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Lords of Finance: The Bankers Who Broke the World

By Liaquat Ahamed

Book cover of Lords of Finance: The Bankers Who Broke the World

Why this book?

I have always been fascinated by World War I history. But as a financial historian, I was especially enthralled by this dramatic story of the four central bankers who ruled that era. With great insight and humanity, Ahamed shows how the bankers’ well-intended struggle to restore the world to “how it was before the war” tragically doomed the world to another war – and taught a generation of future leaders to make smarter decisions after World War II. An essential prelude to the Roaring Twenties! 


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Once in Golconda: A True Drama of Wall Street 1920-1938

By John Brooks, Luke Crawford

Book cover of Once in Golconda: A True Drama of Wall Street 1920-1938

Why this book?

And here we are, in the Roaring Twenties, the decade that showed a nation how much trouble an unruly Wall Street can cause the country! The late John Brooks of The New Yorker had a gift for romping through important financial history in the most entertaining way possible. I discovered this gem of his when I was new to covering Wall Street; I’ve turned to it countless times since, both for the facts and for the fun! 


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The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

By Justin Fox

Book cover of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

Why this book?

Perhaps no academic theory has had a more pernicious impact on how we understand and regulate the markets than the “rational market hypothesis” – the theory that “markets know best” and work best if left alone. Justin Fox explains the rise, the rule, and the ruin of this powerful but fundamentally flawed idea in a remarkably engaging way. A delight to read!


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A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation

By Richard Bookstaber

Book cover of A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation

Why this book?

This is, hands down, the best account of our new age of financial derivatives that I’ve ever read – and I’ve read more than a few! It was riveting and terrifying in equal measure, showing how vulnerable we are to bad ideas emerging from the laboratories of modern finance. A conscientious insider, Bookstaber cares passionately about making markets more stable and less prone to meltdowns and malfunctions. His riveting book helps us make sense of where we are now, and where we may be going.


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