Friday, March 22, 2013

H.G. Wells and the Gold Standard

In The Outline of History, H. G. Wells described conditions in Europe following World War I. For Wells, the postwar disorder was perpetuated by the "delusion of national sovereignty." The disorder was "enormously complicated by the international tangle." For example, there was no unified system of money and credit.

According to Wells, a "frank repudiation" of Europe's war debts (debts largely owed to the U.S.A.) would have "cleared the air." But "only a powerful federal government in Europe could have been so bold and frank," and Europe lacked such a government. Therefore, Europe remained burdened with its war debts until those debts led to impoverishment of peoples and collapse of governments.

Wells summarizes the monetary troubles of several European states, calling his work "history in an arithmetical form." He leaves it to the reader to imagine the anxieties, hardships, and even deaths caused by the "barometric antics of the European currencies."

Summarizing the effects of the European monetary troubles after World War I, Wells writes: "The return to the gold standard in a time when the production of commodities in general outran the release of gold for coinage was all to the advantage of the creditor. Prices fell. He reaped more than he had sown and enterprise was crippled."

Source: The Outline of History by H.G. Wells, chapter 39.

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