Gold Standard, Nationalism, and the neoliberal idea of international monetary system: F. A. Hayek's Monetary Nationalism and International Stability

• This paper sheds lights on the early neoliberal idea of the international monetary system as a counter-argument against the insular capitalism of the 1930s by examining F. A. Hayek’s Monetary Nationalism and International Stability (1937). Hayek understood that the failure of the 19th-century gold standard, which had been accused of being ‘a barbarous relic’, was attributable to its malfunctioning on an international scale rather than the domestic sacrifice involved in its operation. He pointed out that the introduction of the fractional reserve system in the 20th century in nation-states had enabled the pursuit of independent monetary policy by central banks. In the absence of international mandate and disciplines of the international monetary system, the incremental trend of monetary nationalism resulted in the international monetary disorder of the 1930s. Instead of a flexible exchange rates system, Hayek proposed restoring the gold standard with a transnational authority to prevent vicissitudes of nation-states. Whereas the neoliberal idea was marginalized in the postwar period, the single currency of the Euro substantiated Hayek’s vision. With a contextual reading of Monetary Nationalism and International Stability, this paper suggests that the early neoliberals sought to recover the tarnished reputation of the gold standard and provided a vision of the postwar international monetary system.

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HUMANIORA  -- Historia och arkeologi -- Historia (hsv//swe)

HUMANITIES  -- History and Archaeology -- History (hsv//eng)

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Historia

History

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