Communists Foreshadow Nixon Shock

Description

An exceedingly well written and researched article presenting a communist perspective on the international monetary system. The articles were written for presentation at the “Economic Committee Conference” on international monetary systems October 9 & 10, 1965. Under the 1944 monetary system of Bretton Woods the U.S. Dollar was convertible to gold by other nations at a fixed price of $35 an ounce. On August 15, 1971 “Tricky Dick” (i.e. President Nixon) made a bold chess move and permanently severed the U.S. Dollar from gold by executive order. Arguably, a debt default by the United States. The item on offer presents the history of the Bretton Woods system; explains I.M.F. voting rights; France’s disillusionment with America’s balance of payments, and makes a prediction: In order to forestall a run on the US Gold stock, the United States will revalue gold without announcement. The author was correct that the change would happen without announcement, but incorrect on the extent of what Nixon would do in 1971. The article also discusses the advantages and disadvantage of a gold-backed system on poorer nations, bringing up the interesting argument that a new managed currency would be established and controlled by Western Nations whereas gold can provide poorer countries, paradoxically, with a fairer playing field. “[A] new collective reserve unit… has the drawback that the further creation of any new reserves in Western Europe further widens the gap between the right and the poor countries.” (pg. 27). The author concludes that the best solution is a new currency system that is a hybrid of both gold and a managed artificial currency so that each nation could adopt either or. Very scarce. We could locate only two holdings worldwide; none in North America. OCLC number 502366092. NYU’s copies appear to start with the 1979 issues. See Jeffrey E. Garten’s 2021 book Three Days at Camp David. How a Secret Meeting in 1971 Transformed the Global Economy for more on Nixon’s radical shift in international monetary policy.