The Panic of 1873: How a Global Financial Crisis Reshaped Economies
The Panic of 1873 triggered a worldwide economic depression lasting until 1877, with effects lingering into 1879 in some countries. Sparked by railroad speculation, silver demonetization, and post-war dislocations, the crisis led to bank failures, unemployment, and a prolonged downturn known as the Long Depression. In the U.S., it was called the Great Depression until the 1930s. The panic originated in Vienna and spread to Europe and North America, reshaping economic policies and contributing to social tensions.
The panic started two decades of economic stagnation known as the 'Long Depression' that weakened the country's economic leadership.
- fifilura
They sought it with thimbles, they sought it with care;
They pursued it with forks and hope;
They threatened its life with a railway-share;
They charmed it with smiles and soap.
Fits well with the release of Hunting of the Snark 1876 by Lewis Carroll
- glimshe
There are certainly many parallels with our current situation. But railroads were a much bigger segment of the economy then. AI's growth is benefitting a narrower set of people, so I find unlikely that the inevitable collapse of AI investment alone, absent other factors, could wreck the global economy the same way.
- koliber
Quoting the article:
> A boom in railroad construction, 33,000 miles (53,000 km) of track were laid across the country between 1868 and 1873.
> The railroad industry was the largest employer outside of agriculture and involved large amounts of money and risk. A large infusion of cash from speculators caused spectacular growth in the industry and in the construction of docks, factories, and ancillary facilities. Most capital was involved in projects offering no immediate or early returns.
Sounds like the AI bubble.