A picture is worth a thousand words and the only sensible way to engage with economic history, which necessarily involves a lot of numbers, is through graphical representation. In financial markets, there is a venerable history of charting. The future is, by definition, unprecedented, but the past at least provides shadowy hints of what might unfold. History is said not to repeat itself but to “rhyme”.
Accounts of modern economic history often begin with the start of the industrial revolution in 18th century Britain. Just as significant, however, was the financial revolution that graced the country nearly a century earlier. A series of costly wars prompted public finance reforms, and by the early 1700s, Britain had the Bank of England and a liquid market in government debt. Historians have credited the financial environment these developments fostered with Britain’s subsequent military and economic supremacy. It is little wonder, then, that the British people developed a certain affection for gilts – reflected in the nicknames they gave them. These were often references to the chancellors who issued them: ‘Childers’, ‘Goschens’, ‘Daltons’. Even the random number generator for the lottery-based Premium Bonds introduced in the 1950s was personified as ERNIE — and later referenced in a song by the rock band Jethro Tull.