The season of reflection makes it all the more striking how little we publicly remember financial crises. These have a huge impact on our lives: at the end of last year, Britain's economy was about a fifth smaller than it would have been had the 1980-2007 growth trend not been interrupted by the 2008 banking crisis.
Like war, financial crises tend to be born of over-optimism. And like war, one of their lasting legacies is often debt. In 2007 UK public debt was about 36 per cent of GDP. As a result of the banking rescues and subsequent recession, it now amounts to 80 per cent. That's higher than it has been since the mid 1960s, when the country was gradually growing its way out of the debt burden amassed in the two world wars.
After every crash, there are calls to prevent another by all means known to government. Yet arguably the most powerful remedy of all - the memory that boom eventually leads to bust - has hardly been touched. As far as I know, there are no memorials commemorating those who lost their livelihoods during the most recent or any other financial crisis. Nor are there many museums that give public voice to the "manias, panics and crashes" described in Charles Kindleberger's famous history of financial crises.
The absence of museums documenting economic history struck me on a recent visit to Venice. Before the discovery of the New World shifted power westwards, La Serenissima was the linchpin of European trade, buying goods in the markets of Constantinople and the crusader states and then selling them on through Europe at mark-ups commensurate with the risks of shipping in pirate-infested waters. As such, Venice played a revolutionary role in the development of modern finance. The friar often credited with the invention of double-entry bookkeeping, Luca Pacioli, claimed to be merely describing common Venetian business practice.
But there is no museum dedicated to the City's illustrious role in economic history, no gallery displaying those 13th century goods brought back from the Levant or those revolutionary double-entry account books. The City history museum has little more than a room showing the coins minted by the Republic of Venice – one of which, the gold ducat of 1284, became the reserve currency of its day. There are, of course, dozens of museums dedicated to the gothic and Renaissance palaces built and the oil paintings bought with Venice's famed wealth.
London, the linchpin of global trade in the 18th and 19th century, has more to offer those interested in economic history - presumably because it remains a financial centre, whereas Venice is still struggling to reinvent itself as more than a vast work of art. The Docklands museum in Canary Wharf, part of the Museum of London, offers a lively account of British trade and empire. And the museum in the Bank of England contains a few interesting objects, such as a book showing the composer George Frideric Handel, who had both current and investment accounts with the Bank, selling the government bonds the institution was set up to issue. Handel also bought South Sea stock in the infamous bubble of the 1710s - but, unlike his contemporary Sir Isaac Newton, sold out before the crash.
There is a rather limited interactive display on 'financial storms' in the Bank museum. Otherwise, as far as I know, crashes remain more or less totally unremembered in any kind of UK public sphere. Whether or not public commemoration reduces the risk of society making repeated mistakes is unclear; Remembrance Day has not stopped wars being waged. But the stability of the US financial system in the decades after World War Two, which underpinned the golden age of the 1950s and 1960s, is sometimes attributed to the Wall Street Crash and subsequent Great Depression being in 'living memory'.
In the absence of public commemoration, investors - who have more to lose than most - can at least help themselves by fostering private memory. One option is to read Kindleberger's book: I would advise the original 1978 edition, of which copies are available on Amazon for just 7p (the updated editions include recent crises, but are less readable and more expensive). But for regular innoculations against over-confidence, investors might want to start remembrance-tide early. Late October offers plenty of anniversaries, from 'Black Monday' in 1987 to the 1929 Wall Street Crash -take your pick.
