From Malaise to Meltdown

Lee explains how global competition has driven policymakers toward lax regulation throughout history, leading to severe financial crises.

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For the past two centuries, the great power sitting atop the international global financial system has enjoyed outsized rewards. As the saying goes, however, all good things come to an end. Providing insights into the evolution of the global political economy, From Malaise to Meltdown identifies the main instigators behind the global financial crises we’ve seen in the last two hundred years. Michael Lee shows that, in time, power diffuses from the leading economy to others, creating an intensely competitive push for global financial leadership. Hungry for the benefits of global leadership, declining leaders and aspiring challengers alike roll back long-standing regulatory safeguards in an effort to spark growth. Risks to global financial stability mount as a result of this rollback and waves of severe financial crises soon follow.

As Lee deftly shows, the Long Depression of 1873–1896, the Great Depression of 1929–1939, and the financial crisis of 2008 are part of the same recurrent pattern: global competition disrupts the longstanding political equilibria, prompting a search for new, risky ideas among the most powerful states. From Malaise to Meltdown presents a sweeping but accessible historical narrative about the coevolution of power, ideas, and domestic politics, supported by archival research into the risky decisions that ushered in the worst financial crises in history.