Comparing Financial Crises: From Antiquity to Today
Today’s college students undoubtedly think of the the recent “Great Recession” as the example of a major financial crisis. For them, the Great Depression of the 1930s probably seems like ancient history.
But the students who enrolled in “Too Big to Fail: Commerce, Corruption and Crisis in Antiquity,” a spring term course at Washington and Lee University, will soon discover just how ancient financial crises really are and should come away with a better understanding of how modern financial crises reflect those from antiquity.
Sarah Bond, the Mellon Faculty Fellow in History and Classics at W&L, is offering the course through the history department.
“Financial crises don’t happen in a vacuum,” Bond said. “They don’t occur out of the blue, and it’s not the first time they’ve ever happened. They are all part of recurring cycles throughout history. So even though this course focuses on the ancient world, learning about these recurring themes can perhaps help us to better pre-empt something from happening in the modern world.”
Describing the course as a history of economy and economic fluctuations, Bond said that the class will comprise business majors along with classics and history majors as well as a few undecided students.”I’m glad the economics and business majors are taking the course,” she said, “because I think it’s important to those departments, although it’s a class that’s normally taught within a classics department.”
The course syllabus describes ancient economies as dependent on complex financial markets plagued by fiscal collapses, inflation, and instability caused by debt and constant warfare and corruption. In exploring the relevancy of ancient economies for understanding modern economic systems, the impact of war, corruption and disease will be central themes of the course.
Towards the end of the course, the 20 students will divide into pairs to compare an ancient financial crisis with a modern one and will display posters of their work at the Spring Term Festival at the end of the semester.
Some of the comparisons from which students will choose are: the Great Depression and the French financial crisis of the early 19th century; the Bubonic Plague and various famines in the Middle Ages and the Plague of Justinian in the 6th century; Roman hyperinflation and the tulip mania of the 1630’s; the debt crisis under Solon in the early 6th century and the Greek debt crisis today.
“Another financial crisis they could choose is the financial crisis of warfare,” said Bond. “The Peloponnesian War from 431 to 404 BC caused a major crisis in the Hellenistic world because Athens over extended itself by going on the Sicilian Expedition. So students will compare that in large part with the ravages following World War I and World War II.”
During the four-week course, one week will be spent examining one of the biggest financial crises that the Western world has ever seen—the Crisis of the Third Century.
“Essentially, people would say that it was the beginning of the ‘fall’ of Rome,” said Bond, who specializes in this period. “Money was devalued, inflation went crazy, there was a high turnover of emperors and everybody was getting killed. I think that crisis is important, because a mix of factors created it as opposed to just one thing. That’s just like our recent financial crisis in America that was a confluence of many different things such as corruption and deregulation on Wall Street and people taking out home loans they couldn’t afford. Part of showing the complexity of the ancient economy is to needle out those factors and show that there a lot of different stories coming together.”
The course will also look at whether the ancient economy was ‘primitive’ or ‘modern,’ something that people have argued about for a long time. “Some of the leading scholars, especially in Britain in the 1970’s, argued that the ancient economy was very primitive and that it has evolved and become more complex over time,” said Bond. “So that’s the evolutionary model of the economy.”
“But an increasing number of scholars in the 1990’s and 2000’s say that the ancient economy was quite complex and we don’t give enough credit for how complicated it was, which is the view I agree with. I think it was actually much more advanced and nuanced and that the idea of progress is false and misleading. Because if we are really progressing, why do we keep regressing back into financial crises? History is much more cyclical than most people think it is and, in the end, we’re really very much like our predecessors.”
Bond, who joined the W&L faculty as the Mellon Junior Fellow this year, received her Ph.D. in ancient history from the University of North Carolina at Chapel Hill from which she also received her M.A. She earned her bachelor’s degree in history from the University of Virginia.