Times The Economy Was On The Verge Of Total Collapse

The COVID-19 pandemic essentially laid waste to the economy, and just as it had gradually rounded back into shape by early 2022, another crisis arrived - this time Vladimir Putin's incursion into Ukraine - to shake the global financial foundation. The lesson, it seems, is that economic calamity is perhaps more common than we realize.

Before you start stockpiling canned goods and liquidating your assets, you should know that the world has weathered serious economic issues before. From the beginning of human civilization all the way to very recent history, there are countless examples of times the world economy almost collapsed. In fact, to look at the numbers, you might get the impression that the world as a whole is always inching toward or recuperating from complete financial ruin. 

The world we live in is so remarkably intertwined on a monetary level that it's essentially a house of cards just waiting to collapse the moment some greedy a-hole or careless moron takes their eye off the ball. Here are just a few historical crises that pushes the economy to the brink.

Photo: Dorothea Lange via Wikimedia Commons

  • The Credit Crisis Of 1772 Was Caused Because Some Deadbeat Didn’t Want To Pay Back His Debts
    Photo: Johann Zoffany / Wikimedia Commons / Public Domain

    The Credit Crisis Of 1772 Was Caused Because Some Deadbeat Didn’t Want To Pay Back His Debts

    In the 18th century, economic expansion was heavily reliant on investors’ and entrepreneurs’ ability to get credit for their projects. The stability of that credit was, in turn, heavily reliant on people's faith in banks. Cut to a Scottish banker jerk named Alexander Fordyce, who incurred a whole lot of debt and then decided not to repay it.

    That became big news in London, because Fordyce was a partner in a huge banking firm in the city. When Fordyce ducked out to avoid his debtors, people lost their faith in the banks who were supposed to be, you know, reliable. The result saw a slow freeze of the European economy that seriously hindered the public’s faith in debt and credit. 

    Too bad it didn’t stick.

  • An Economic Boom Turned Disastrous In The 1920s, Leading To The Great Depression
    Photo: Dorothea Lange / Wikimedia Commons / Public Domain

    An Economic Boom Turned Disastrous In The 1920s, Leading To The Great Depression

    The 1920s saw the American economy swell to heights never before imagined. And that's how the decade is remembered - as one of beaded, alcohol-flowing, flapper-dancing decadence. Unfortunately, that exuberance led to the overvaluing of stocks on Wall Street. When the truth came out, the American economy was decimated. By 1931, more than six million Americans were out of work.

    The economic collapse that landed many working Americans in bread lines didn’t end for a full decade, until the Nazi war machine made American manufacturing a vibrant, thrumming part of the war effort.

  • Small Banks Hurt Themselves To Cause The Panic Of 1837

    When Andrew Jackson was president in the early 1830s, he operated under the impression that a National Bank was a horrible idea. As a result, he siphoned a whole bunch of funds from the Second Bank of America (AKA, National Bank 2.0) and gave that money to America’s small banks. Sweet, right?

    It would have been if the country’s small banks hadn’t sunk all that money into overvalued speculations on exciting new lands in the West. Too bad most of it turned out to be normal farmland or - worse - huge expanses of basically useless rock or sand (it sure is pretty, though).

    In 1837, during the early presidency of Martin van Buren, the sh*t really hit the fan. The President refused to change his predecessor's policies or stabilize the ailing economy, a decision that crippled the US economy well into the 1840s (and lost van Buren his re-election bid in 1840).

  • The Oil Crisis Of 1973 Wrecked More Than Just A Trip To The Gas Pumps
    Photo: David Falconer / Wikimedia Commons / Public Domain

    The Oil Crisis Of 1973 Wrecked More Than Just A Trip To The Gas Pumps

    In 1973, the United States decided to pitch in and help out Israel during a war they were fighting against... well, basically everyone else in the Middle East. When the Arabs on the other side of the Arab-Israeli War got wind of US interference, things got nasty. Most of those countries were part of the Organization of Petroleum Exporting Countries, or, as they’re known on the street, OPEC. 

    In response to US aid, OPEC imposed an embargo on United States oil imports, which pretty much halted the US economy (and ruined the traffic flow around gas pumps nationwide). Without the United States pitching in and buying stuff, the rest of the world soon felt the ill effects of OPEC’s embargoes.

  • The Economic Crisis Of The 14th Century Was Caused By A Royal Thirst For War
    Photo: Edmund Blair Leighton / Wikimedia Commons / Public Domain

    The Economic Crisis Of The 14th Century Was Caused By A Royal Thirst For War

    From about 1300 until 1450, the Church suffered from a decline in power in Europe and England. Thanks to increasingly warlike kings in France and England, the Church became a target for taxation and outright plunder. Even more, the kings of Europe levied incredibly high taxes on the people of their countries in an attempt to fund their need for constant warfare. 

    Though most of the skirmishes were tiny, the result was the centralization and then dissipation of most of Europe’s funds just so the richest people on the Continent could wage meaningless non-wars against one another. One of the major repercussions of this depletion of funds was the rise of sub-human living conditions that helped brew up the Black Death.

  • Tulip Mania Almost Destroyed Holland... No, Really

    In 1593, some enterprising flower peddler from Turkey introduced tulips to Holland, and the Dutch went absolutely crazy for the little flowers almost immediately. Unfortunately, the flow of tulips into the country was slow, which drove the price of the flower higher and higher. 

    Then, the Dutch tulips got the coolest disease ever: something known as mosaic, a non-threatening disease that turned the petals vibrant colors. This alteration only drove the price of tulips higher. It wasn’t long until people were doing everything they could - even cashing in their life savings and liquidating land - to get their hands on some tulip bulbs. As it turns out, tulip bulbs aren’t actually worth all that much, and most of the investments in tulips turned out to be (surprise!) basically worthless. The resulting depression made the Dutch resistant to the entire speculative investment game for decades to come.