The Cross of Gold

Abstract

Appropriately for a story about revolution, the ghost of Lenin began to haunt deliberations. The IMF officials appeared to regard themselves as a politburo established to defend the Bretton Woods revolution. They were confronted by a counter-revolutionary who was aware of Keynes’s (probably fictitious) reference to Lenin’s dictum about debauching a currency as a prelude to revolution (Friedman 1968a, 174). Friedman (1988a, xix, xxiv) regarded the NEP as ‘a sharp break in the monetary regime adopted by the major Western countries’. But the NEPers were apparently unaware that they were rhetorically the heirs of Lenin.¹ The first NEP was Lenin’s attempt to reach a temporary compromise with the domestic forces of capitalism; Nixon’s NEP fatally compromised the Bretton Woods system (Friedman 1972a [1971], 426). As frantic efforts were being made to revive the Bretton Woods system, Friedman advanced the prospects for international monetary revolution by pressing Nixon to debauch still further the currency of the Bretton Woods system, not through inflation but by undermining the role of gold.