Dollars at a Discount

The American dollar has been toppled from its throne, the bankruptcy of the International Monetary Fund system has become obvious, and the world now faces a period of currency disorder. The problem confronting the world’s governments is how to mitigate the gravity of this disorder and how to minimize its duration.

The foundations of the present crisis were laid at Bretton Woods, New Hampshire in 1944. The chief architects were Lord Keynes of Britain and Harry Dexter White of the United States. The system they set up was designed to imitate a gold-standard system but not really to be one. It was to free every country from the annoying necessity of keeping its currency convertible into gold on demand. It was to allow every country freedom to “manage” its domestic currency and credit mainly, if not solely, with regard to “the needs of its domestic economy,” particularly the need to maintain constant full employment at home. It was to relieve each country from the necessity of maintaining a “mere external stability” for its currency unit.

HH

About the Author

Henry Hazlitt

Featured Tags

The American dollar has been toppled from its throne, the bankruptcy of the International Monetary Fund system has become obvious, and the world now faces a period of currency disorder. The problem confronting the world’s governments is how to mitigate the gravity of this disorder and how to minimize its duration.

The foundations of the present crisis were laid at Bretton Woods, New Hampshire in 1944. The chief architects were Lord Keynes of Britain and Harry Dexter White of the United States. The system they set up was designed to imitate a gold-standard system but not really to be one. It was to free every country from the annoying necessity of keeping its currency convertible into gold on demand. It was to allow every country freedom to “manage” its domestic currency and credit mainly, if not solely, with regard to “the needs of its domestic economy,” particularly the need to maintain constant full employment at home. It was to relieve each country from the necessity of maintaining a “mere external stability” for its currency unit.