Is history still useful in a world that is changing as quickly as our one?
History is, by definition, the study of everything in the past. A lot of people think of history, and think of dusty volumes charting the rise and fall of British kings. There might be a war or two. Most just think of Henry VIII. So why is it still such a popular subject, and why is it important to our lives today?
Well, think about something that has happened recently. Let’s take the 2009 financial crisis, the effects of which we have been feeling for the last six years – and it looks like this will continue. David Cameron’s government will now be advocating austerity measures for the next five years that he is power. Meanwhile, Greece is on the verge of leaving the Euro, due to hated austerity measures. This is the result of poor decisions made by big corporations and banks. They have a shocking amount to answer for.
But why were we shocked? Large institutions have a long, long history of causing national economic crises. Let’s go back to 1711. The South Sea Company had just been founded in London and was trying to encourage people to invest in their company. To encourage this investment, the South Sea Company claimed to be successfully trading. In truth, their trade was continually being disrupted due to hostilities with Spain. However, they kept the public in the dark about this, and quickly individuals began to invest in the Company. The share price rose from £128 in January, 1720 to £1,050 in June of the same year. This was an incredible increase, and it seemed too good to be true.
It was. When individuals started to cash in their shares, the Company did not have enough money to pay them back, as a result of their failing trade, and it soon collapsed. As was the case in our more recent financial crisis, not everyone was a loser. Those who sold their shares earlier made a substantial profit. Thomas Guy, for example, bought £54,000 worth of South Sea Company stock in April, and sold it over six weeks to make £234,000 of profit. However, in general, people lost a huge amount of money. Formal investigations in 1721 revealed that the Company directors were committing fraud, and various Members of Parliament had also facilitated this.
Which elements of this story sound familiar? Corporations misleading their customers? The government not regulating companies strictly enough? With new technology rapidly changing the way we live, it can sometimes be surprising to find out how many connections you can make between the past and the present. Making connections is something that tutors will be impressed by at your interview, so try doing it yourself – take a historical event, and see what it can tell you about today. You might be surprised!