1918: Soviet Debt Repudiation
Soon after seizing power in Russia in 1917, Lenin’s communist government declared it would not repay mountains of foreign debt and effectively closed off the country to the world’s economy.
The debt had been racked up under the tsarist government, which had borrowed heavily and sold millions of government bonds, mostly to French citizens looking for a solid investment.
The head from a statue of Russian Tsar Alexander III being torn down after the Bolshevik Revolution.
The move outraged Western governments, especially the French, who were on the verge of bankruptcy following World War I.
A few months after the shock Soviet announcement, Allied military forces intervened in Russia’s civil war in an unsuccessful attempt to help reverse the communist takeover.
A crowd of French “debtors” in a Paris courtroom in 2001 display Russian government bonds purchased before the Bolshevik Revolution.
More than a century later, many descendants of the French debtors have not given up on the antiquated investments. A website for people who still own the imperial Russian bonds aims to “bring together the holders of loans issued or guaranteed by the Russian state before 1917…in order to obtain their reimbursement.”
1921-1923: Hyperinflation In Germany
A woman selling tin cans on the streets of Berlin in 1923 amid poverty and dizzying hyperinflation.
At the outbreak of war in 1914, Germany’s parliament suspended the requirement for its currency to be backed by gold. Germany hoped to pay for its World War I effort by simply printing extra money.
As the fighting dragged on, Germany pumped tens of billions of extra marks into circulation and sent virtually all of the country’s resources to the front lines. When Germany was finally defeated in 1918, the country had a glut of banknotes, but a shortage of everyday goods.
The perilous situation worsened after Germany signed the Treaty of Versailles in which the country “accept[ed] responsibility” for war damage and committed to repay the Allies the equivalent of billions of dollars. As German authorities printed yet more money to repay these debts, inflation began to run out of control.
A German man using worthless banknotes for wallpaper in 1923.
A journalist in Berlin in 1923 recalled "The price of tram rides and beef, theater tickets and school, newspapers and haircuts, sugar and bacon, is going up every week…no one knows how long their money will last, people are living in constant fear, thinking of nothing but eating and drinking, buying and selling.”
Many Germans fled the country amid the turmoil; others became radicalized.
In 1923, at the peak of the hyperinflation the leader of a new political movement in Germany promised he could “make life cheaper.” His name was Adolf Hitler.
1929: Wall Street Crash
A crowd gathers outside the New York Stock Exchange on October 29, 1929, as the stock market lost nearly one-quarter of its value in two days.
After years of a roaring economy and a soaring stock market, America in the 1920s was enjoying what The Great Gatsby author F. Scott Fitzgerald called “the greatest, gaudiest spree in history.” But the party ended in October 1929 when stock prices unexpectedly plummeted. The sudden drop in the overhyped shares sparked a panic which fed upon itself as people rushed to get their cash out of the stock market.
Within three years the market had lost nearly 90 percent of its value.
The practice of people buying stocks with money loaned by eager stockbrokers proved ruinous for many. When the market crashed, those investors were left with a fraction of the money they put in, but 100 percent of the debt.
A woman and her children living in poverty in Oklahoma in 1936.
Soon after the stock market crash, the Great Depression set in, leaving millions of Americans homeless, jobless, and aimless. The depression soon spread around the globe and from 1929 to 1932 the world economy shrank by an estimated 15 percent -- compared to just 1 percent following the global recession of the late 2000s.
1998: Russian Financial Crisis
Muscovites jostle to enter a bank in the hope of withdrawing their savings on August 27, 1998, as the value of the ruble was plummeting
When the price of oil fell in 1997 in the wake of a financial crisis in Asia, Russia immediately felt the pinch. The young capitalist economy was largely reliant on oil money and had little cash saved in reserve.
In August 1998, Russia’s central bank was forced to unpeg the overvalued ruble from the dollar. In the space of a month, the ruble lost two-thirds of its value and many people, including the country’s vulnerable elderly, had their savings largely wiped out. By September, some 230,000 Russians had lost their jobs and within a year the average income in Russia dropped by one-third.
An elderly man busking in Moscow in December 1998.
With inflation running at close to 84 percent through 1998, widespread panic buying added to the trauma as people emptied stores and hoarded food to avoid the higher prices that were coming. But the recovery that followed -- buoyed by a rise in oil prices and the export benefits of a cheap ruble -- was swift.
2008: Subprime Mortgage Crisis
A woman carrying the contents of her desk after being made redundant from Lehman Brothers’ London branch in September 2008.
In the early 2000s, U.S. home prices were rising and mortgages were offered to just about anyone who wanted a property. As a result, the complex financial markets that fed off real estate loans were booming.
But by 2007, as increasing numbers of buyers without a steady income were unable to make their monthly repayments, the trade in “mortgage-backed securities” began to fall apart.
In 2008, the financial giant Lehman Brothers -- a major player in the mortgage securities market -- filed for bankruptcy after 158 years in business. It was the largest bankruptcy filing in U.S. history.
A clash in Greece in 2014 between police and young people occupying Thessaloniki’s Labor Department.
America’s stock market plummeted in 2008, unemployment doubled, and soon the “contagion” of economic recession spread around the world. Europe was especially hard hit and Greece entered a recession that lasted from 2009 until 2018 -- the longest ever recession for an advanced capitalist economy.