Abstract
The third cluster of monetary innovations that followed the cataclysmic destruction of the 1914–18 war took place, initially, not in the market but in the study and in the imagination of scholars. Only later did they infiltrate the corridors of power. These theories turned out to be as influential as America’s practical innovations and more enduring than the attempted elimination of money by the USSR. By the outbreak of World War II, a new approach was needed. How would trade, investment and economic relations between states be coordinated? And if money was not to be gold, what could it be? Some answers were beginning to emerge from the new theoretical ideas.
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Notes
- 1.
Such questions still troubled such economists as Milton Friedman half a century later, after extensive experience of the difficulties of managing paper money. In 1986 Friedman said that while he was not advocating a return to the gold standard, he had come to the belief ‘that leaving monetary and banking arrangements to the market would have produced a more satisfactory outcome than was actually achieved through government involvement’.
- 2.
It was an intuition that, it must be said, sometimes led Keynes astray. For example, he admired the Soviet attempt to do without money. Indeed, he shared the objective. Although he saw capitalism as being driven by love of money, he would have liked to eliminate such a motive from it. Bolshevism had a moral edge over capitalism precisely in condemning personal enrichment and for its attempt to build a system that would not need to rely on it (Skidelsky 1992).
- 3.
This conference is now viewed as a seminal turning point in twentieth-century liberal thought. Organised by Louis Rogier, French philosopher editor of Librarie de Medicis, key publisher for Rueff and other liberals, this brought together Raymond Aron, Robert Marjolin, Wilhelm Röpke, von Mises, Hayek and Michel Polanyi (brother of Karl).
- 4.
As Ernst-Ulrich Petersmann, a leading international economic lawyer, wrote in 1983:
The common starting point of the neoliberal economic theory is the insight that in any well-functioning market economy the “invisible hand” of market competition must by necessity be complemented by the “visible hand” of the law. (Slobodian 2018, 7)
- 5.
Neoliberalism is also sometimes used almost as a term of abuse, to refer to market fundamentalism—the notion that, crudely expressed, ‘markets are always right’, ‘let the market decide’; it is a view attributed to people who believe that the role of the state should be as small as possible.
- 6.
HAMLET: ‘there is nothing either good or bad, but thinking makes it so.’
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Pringle, R. (2019). Europe Between the World Wars: A Ferment of Ideas. In: The Power of Money. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-25894-8_6
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