Financiers who changed the world

The effect of the financier.
Thanks to our friends and colleagues from the Mann, Ivanov and Ferber publishing house, we have another very exciting book that will be of interest to everyone who is not indifferent to history, economics, the history of economics, who thinks about the role of the individual in history and about the increased influence of financiers on historical process.
Indeed, the modern world is very different from the world of the recent past. If earlier history was shaped by rulers, statesmen, politicians and military leaders, now the world largely depends on finance and financiers. And if the "butterfly effect" that changed the future, described in Ray Bradbury's fantastic story, was a literary hyperbole, a fantasy, then the "financier effect" is real.
In connection with the growth of the power of finance, their influence on political and state power, the responsibility of financiers naturally increases. The modern world imposes on them, in fact, the same moral requirements as on state rulers.
The heroes of this book influence not only individual countries, as, for example, George Soros influenced the development of the UK economy, playing at some point against the pound. The worldview of an entire era would have been different if in 1818 in the city of Trier a third child named Karl had not been born in the family of the lawyer Heinrich Marx. We can't even imagine this other world, but like the world in Bradbury's story, it would be drastically different.
Or, for example, if the former head of the US Federal Reserve, Alan Greenspan, did not have unique mathematical abilities and was not fond of the mathematical models of Keynes and Wolfowitz, then it is quite obvious that the world would look different. And if the next head of the Fed, Ben Bernanke, in his youth had not been infected with the theories of Milton Friedman - an outstanding economist, Nobel laureate, one of the heroes of the book - then there is no doubt that we all, without exception, would have lived a little or even completely differently.
Here in one book collected biographies of the most famous financiers of the last three centuries. Among them there are wise men, and "robbers", and sincere guardians for human well-being. You are waiting for interesting, fascinating stories of financiers who in many ways shaped our world today.
Dmitry Bugaenko, Managing Partner investment company "Veles Capital"

Foreword
In October 2013, the Swedish Academy of Sciences, which has awarded the Alfred Nobel Memorial Prize in Economics since 1969, announced a decision to split the 2013 Prize among three financial economists, Eugene Fama and Lars-Peter Hansen of the University of Chicago and Robert Schiller of Yale. For professional economists, the choice of the Nobel Committee came as a surprise: it might seem that Fama and Schiller were saying exactly the opposite things. The general public was perplexed - how can you give an award to scientists involved in finance after the global financial crisis has left millions of people out of work?
However, the logic of the Nobel Committee is clear: the choice of laureates emphasizes both the importance of the financial economy and its complexity. The history of modern economic development shows that progress is practically impossible without a developed capital market. The advent of financial innovations—limited liability two hundred years ago, credit cards in the middle of the last century, microcredit today—have made not only a handful of capitalists richer, but hundreds of millions of people around the planet. At the same time, finance is very difficult - both for scientists and, even more so, for those who work in the financial market.
Few people know that mathematics and physics of the twentieth century owe entire sections to the financial economy. Albert Einstein's first known work, published in 1905, considered the Brownian motion of particles as a random process. However, a similar pattern was described in Louis Bachelier's work on stocks and options markets five years earlier! By the way, contrary to popular belief, many financial theorists, whose contribution to science, judging by the list of publications and awards, seems purely academic, were quite successful in trading in the market. For example, David Ricardo, one of the founding fathers of modern economics, was a multimillionaire. And what a sad contrast the fates of the outstanding Russian economists of the 20th century, Nikolai Kondratiev and Yevgeny Slutsky, look like! One was shot on false charges, the other was forced to leave scientific work just at the very time when his models became the basis of modern microeconomics.
This book is structured like encyclopedia, but the attentive reader will see that the history of finance is a single whole. Even Mayer Rothschild, the hero of one of the first chapters, the financial titan of the 19th century, understood: "who owns the information, he owns the world." For him, this meant only that you can make good money by knowing what others do not know. A century and a half later, the work of Joseph Stiglitz, which is discussed at the end of the book, gave these words a special meaning - it became possible to talk about how much information costs and how much you have to pay to overcome information asymmetry. Studying the Great Depression, the largest financial crisis of the last century, the heroes of the book became famous - John Keynes, who was the first to offer a practical solution, Paul Samuelson, who was the first to create a full-fledged theory of "Keynesianism", Milton Friedman, who explained what money is in the modern world, and Ben Bernanke, scientific whose work on the history of monetary policy helped to cope with the crisis of 2008-2009.
But, of course, finance throughout the history of mankind has attracted the attention of people not because researchers have the opportunity to write formulas with integrals and carry out complex calculations. Financial history is a record of amazing victories and disastrous defeats from which there are many lessons to be learned. And even if there is no desire to risk their own money, the book gives the reader the opportunity to experience the ups and downs of the great financiers and understand how and why they happened.
Konstantin Sonin, Vice-Rector of the Higher School of Economics

Foreword от автора
For several centuries now, stories about the masters of finance and the authors of economic theories have been haunting the minds of millions of people. The names of Adam Smith, Karl Marx, David Ricardo have been known to us since school, but few people know how these scientists lived and worked.
Huge fortunes inspire respect, fear and envy. And the attitude towards their creators is ambiguous. How did the Soros, Morgans, Rockefellers, Rothschilds earn their money? What helped them - entrepreneurial talent and the huge work of several generations? Or were they just lucky to be in the right place at the right time?
Financiers showed themselves at turning points in history, changed the world, got rich and went bankrupt. And although they say that big money is made in the silence of offices, it is always a risk, passion and excitement, invisible the work of a sharp mind, hidden behind external coldness and restraint.
Some of the great reformers suffered persecution and even died for their ideas. Among them is the great Russian economist Nikolai Kondratiev, whose name was erased from the history of our country for a long time.
The reforms of Sergei Yulievich Witte are undeservedly hushed up, although it was under him that Russia became an industrial world power: we still compare today's economic indicators with the figures of 1913 achieved under Witte. It was, perhaps, the only time in the history of our country when the economy was controlled by market mechanisms.
On the pages of this book you will find 35 stories about the life and achievements of great financiers and economists, statesmen and scientists. These people stood at the origins of the modern world financial and political system. Their actions had an impact on the development of the world economy, the welfare of countries and peoples. Many of them possessed power and power, and their actions attracted attention and fascinated the masses of people. Until now, their thoughts influence the minds and determine the course of our lives.
Their lives are stories of success and billions of dollars, intrigues and financial adventures.
They are discussed in this book. Who is she for?
For everyone who is interested in the history of the development of the world economy and the global financial system.
For those whose life is connected with financial management.
For those who would like to become richer, change themselves and the world and find their own blue ocean!
Sofya Morozova, MBA, General Director of Auditstroy LLC

01. Adam Smith

(1723–1790)
Philosopher, economist, free market ideologue, leading exponent of classical political economy

FATHER OF ECONOMIC SCIENCE
Adam Smith is the founder of modern economics. It was he who formulated the ideas about the basic laws of the market. Smith first described "economic man" and introduced the concept of "invisible hand of the market". He was convinced that by creating his own well-being, each person contributes to the well-being of society.
Childhood and youth

Adam Smith was born in 1723 in the Scottish town of Kirkcaldy. His father, a customs official, died before his son was born. The boy was raised by his mother. She gave Adam all her time and subsequently had a huge influence, always remaining the closest person to Smith.
In 1737, when Adam was fourteen, he entered the University of Glasgow, one of the most advanced in the United Kingdom. Studied mathematics and philosophy. Smith was most impressed by the lectures of Francis Hutchinson, the first university professor to prefer spoken