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Crashed

BOOK REVIEW

Crashed

Adam Tooze situates the genesis of the Global Financial Cri

by Dr Sebastian Schwark and Anton Strukoff

Adam Tooze’s Search for Modern Power

Born in London and schooled between Heidelberg and England, Adam Tooze, the grandson of a Soviet spy turned British senior civil servant equally describes himself as possessing dueling left-liberal loyalties, split between ‘England, Germany, the island of Manhattan and the EU.’ A Cambridge- educated economic historian by training and thinker who finds his location in the marketplace of ideas as that of a European social democrat, Tooze
views his own œuvre as no less than that of the ‘history of power in the modern age’. By his own admission, Tooze’s most recent book, Crashed: How a Decade of Financial Crises Changed the World should be situated as an episode in his wider bibliography, including works such as The Deluge, a study of America’s remaking of global order between 1916 and 1931,
The Wages of Destruction, a history of the economy of Nazi Germany, and his first book, written for his PhD at the London School of Economics, Statistics and the German State: The Making of Modern Economic Knowledge from 1900 to 1945. Tooze’s impressive output of academic and
popular histories has likewise been matched by his prolific voice as a public intellectual. After completing his PhD, Tooze taught at Jesus College, Cambridge and Yale University before moving on to Columbia University in the City of New York, taking up both the Kathryn and Shelby Cullom Davis Professorship of History and the post of Director of the European Institute.
From the pages of the London Review of Books, to The Guardian, Foreign Policy, and the Financial Times, Tooze’s writings on the contemporary political economics of Europe and the United States grants his readers a privileged view into the mind of a preeminent thinker on critical contemporary questions ranging from the systematic shocks of Covid-19, the economics of climate change and energy politics, to central banking and the international institutions that seek to forge and define the global order.

Crashed: When the Music Stops

In Crashed, Tooze seeks to challenge popular understandings of the Global Financial Crisis by situating it amongst a longer historical horizon, from the birth of the Bretton Woods System to the election of Donald Trump in 2016. Along the way Tooze jumps from the American mortgage crisis to the European debt crisis, from the rise of nationalist movements and demise
of social democratic politics amongst North Atlantic voters and politicians, to the financialisation of Eastern European economies to the collapse of Southern European ones, the Russian annexation of Crimea and the colour revolutions of Ukraine and Georgia, the wars of the Middle East to China’s astronomic rise alongside the stagnation of the wider developing world. Warren Buffet’s maxim that “only when the tide goes out do you discover who’s been swimming naked” may be apt, and for Tooze in Crashed, the answer appears to be: nearly everyone. For Tooze: ‘Tracing the inner workings of the Davos mind-set is not the only way to understand how power and money operated in the course of the crisis.’ Instead, he examines the wider structural and historical factors of the Crisis, rooted in the financialisation of the global economy centred around the London-New York banking corridor.

Tooze argues that though the idea of an ‘all-American crisis’ was eagerly taken up by all sides, from politicians to commentators, the reality of the financial crisis is one of ‘profound interconnection’ and an ‘interlocking matrix’ revolving not around the trade corridors of China and the United States but the North Atlantic.

Tooze punctuates his chapter on the roots of the subprime mortgage crisis by relaying the late- summer of 2007 tale of Citigroup CEO Chuck Prince telling journalists that ‘as long as the music is playing you’ve got to get up and dance. We’re still dancing.’ Quotations of political and especially financial hubris and triumphalism punctuate Crashed and are Tooze’s way of illustrating to his reader that the lessons of the Global Financial Crisis have not only not been learnt, they have not even begun to be grasped. Tooze argues that though the waves of the financial crisis were seen to have crashed against the shores of economic stimulus, quantitative easing and bailouts, in reality, the impacts of the financial crisis are only starting to be felt.


The Covid-19 Shocks and Crashed

By his own admission, and as a result of conversation with British essayist Perry Anderson in the New Left Review, though global in scope, Tooze’s work makes notable omissions when it comes to including the financial, political, and economic experiences of states such as Japan, alongside wider regions such as the Middle East and North Africa.

Despite these omissions, Crashed marvellously succeeds in elevating financial and economic jargon to the heights of readability through weaving his history with anecdotes from the halls of modern power. From the towering European Central Bank in Frankfurt, to the US Federal Reserve, the skyscrapers of Wall Street and the City of London, Tooze ensures that the human element, be they the mandarins of Brussels and Paris, or the powerbrokers in Davos and the Kremlin are highlighted in his gripping economic tale.


When asked about the influence of the French Revolution on world history, Chinese Premier Zhou Enlai is reputed to have replied that it was ‘too early to say’. Though the quote was perhaps taken out of context, it can be seen to exhibit the difficulty of evaluating the repercussions of world-historical events without the benefit of a long period of perspective. For most historians, a globally significant event such as the financial crisis of 2008 would require far more than a single decade of hindsight to accurately evaluate its myriad impacts.

Readers of Crashed will thus do well to compare Tooze’s conclusions drawn the crash of 2008 with the systematic economic shocks caused by the Covid-19 crisis. Writing presciently in 2018, for Tooze: ‘What we have to reckon with now is that, contrary to the basic assumption of 2012-2013, the crisis was not in fact over. What we face is not repetition but mutation and metastasis.’ Mario Draghi’s statement that the ECB would do ‘whatever it takes’ to save the euro at the height of the debt crisis pales in comparison to the expansion of government balance sheets as a result of drastic collapse in demand stemming from the disruptions to supply chains, border closures, and rolling lockdowns. While a history of the impacts of the Covid shocks to the global economy a decade onward may be too short of a historical timeframe to holistically portray this similarly world-spanning event, one hopes that when such a project is mounted, Adam Tooze is its author.