Choice in Currency: A Way to Stop Inflation

Choice in Currency. A Way to Stop Inflation. London: Institute of Economic Affairs (Occasional Paper 48), February 1976/1977, 46 pp.


The chief root of our present monetary troubles is, of course, the sanction of scientific authority which Lord Keynes and his disciples have given to the age-old superstition that by increasing the aggregates of money expenditure we cannot lastingly ensure prosperity and full employment. It is a superstition against which economists long before Keynes had struggled with some success for at least two centuries. It had govern most of earlier history. This history, indeed, has been largely a history of inflation; significantly, it was only during the rise of the prosperous modern industrial systems and during the rule of the gold standard that over a period of about 200 years (in Britain from about 1714 to 1914 and in the United States from about 1749 to 1939) prices were at the end where they had been at the beginning. During this unique period of monetary stability the gold standard had imposed upon monetary authorities a discipline which prevented them from abusing their powers, as they have done at nearly all other times. Experience in other parts of the world does not seem to have been very different: I have been told that a Chinese law attempted to prohibit paper money for all times (of course, ineffectively), long before the Europeans ever invented it!”

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