Ever since the financial crisis of 2008, doubts have been raised about the future of capitalism. Certainly, seven years of doubtful recovery from the recession of 2007 and then another recession in 2012 in several European countries generated pessimism about the ability of capitalist economies to deal effectively with the persistent instability of the global financial system. At the heart of this pessimistic outlook is a deeper concern over the perils of international finance, compounded by confusion over the proliferation of exotic financial products marketed by hedge funds, venture capitalists, and assorted niche firms that make up the “shadow banking” community. No wonder new studies appear almost daily that try to explain to the wider public, as well as overwhelmed policy makers, what went wrong and what should be done now and in the future to avoid a repeat disaster. As President Bush remarked to his top economic policy makers, Henry Paulson, US Secretary of the Treasury, and Ben Bernanke, chairman of the Federal Reserve System of the US, at the height of the crisis in September 2008, “Someday you guys are going to need to tell me how we ended up with a system like this … we're not doing something right if we're stuck with these miserable choices.”

This book joins a long list of historical works designed precisely to explain to former President Bush (and the rest of us) just how we ended up “stuck with these miserable choices.” Most studies to date provide detailed indictments of the apparent perpetrators of the crisis, beginning with the prime movers – variously profligate politicians, indifferent regulators, or opportunistic financiers – then move on to the propagators of the crisis – rampant greed, ignorance, or indifference of the general public. Few note the international elements; most prefer to focus outrage on the villains near at hand or, most persuasively, on the US with its complex financial system and overwhelming wealth at the center of the international financial system since the Second World War.