The Library of Mistakes EP 27: Seven Crashes (with Harold James)
Jul 8, 2024
Harold James, author of Seven Crashes, discusses the historical impact of supply shocks on globalization and capital flows. The podcast explores the responses to economic crises by influential figures like Keynes, the challenges faced by central banks in addressing supply side shocks, and lessons learned for a more optimistic future.
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Globalization After Shock
- The 1970s oil supply shock spurred globalization by stimulating a search for demand.
- This led to increased capital flows, particularly the recycling of petrodollar surpluses.
Marx Studies Capitalism
- Karl Marx, witnessing capitalism's resilience after the 1840s crisis, studied economic data at the British Museum.
- He hoped to find predictable patterns but lacked the mathematical tools to do so effectively.
Capitalism's Core
- Capitalism's core, the propensity to trade, is universal, even appearing in planned economies and extreme environments.
- When suppressed, trade becomes irrational and can contribute to system collapse.