The World Wars

On August 4, 1914, Great Britain suspended gold convertibility. Within days, every major belligerent had done the same. The pre-war gold standard — which had constrained government spending and required that paper money be redeemable in gold at a fixed rate — was suspended within the first week of…

World War I was the most expensive conflict in human history to that point — and the question of how it was paid for shaped both the war's outcome and the subsequent economic history of the 20th century. The war cost approximately $200 billion in 1913 dollars across all belligerents — an…

John Maynard Keynes resigned from the British Treasury delegation at the Paris Peace Conference in June 1919 and wrote The Economic Consequences of the Peace in six weeks. Published in December 1919, it became one of the most influential — and prophetic — economic texts of the 20th century. Keynes…

The German hyperinflation of 1921–1923 is the most famous monetary catastrophe in modern history. The iconic images — a wheelbarrow of banknotes needed to buy a loaf of bread, children playing with bricks of currency, prices changing between ordering a meal and paying for it — represent something…

Germany in January 1933, when Hitler became Chancellor, was a country in deep economic crisis: six million unemployed, hyperinflation still fresh in living memory, reparations obligations, and severe restrictions on military expenditure under the Treaty of Versailles. Yet by September 1939…

Lend-Lease was the United States' mechanism for supplying the Allied powers with war materiel before America's formal entry into WWII — and positioning itself as the indispensable financial power that would shape the post-war international order. Between 1941 and 1945, the US provided…

The "guns and butter" problem is one of economics' oldest examples: a government with finite resources must choose how much to allocate to military spending ("guns") versus civilian consumption ("butter"). Lyndon Johnson's refusal to make this choice during the Vietnam War era — trying to fund…

On August 15, 1971, President Nixon announced that the United States would no longer redeem US dollars for gold at the fixed rate of $35 per ounce — unilaterally ending the Bretton Woods monetary system and severing humanity's last remaining direct link between paper money and gold. The decision…