The Gold Standard at the Turn of the Twentieth Century

The Gold Standard at the Turn of the Twentieth Century: Rising Powers, Global Money, and the Age of Empire

Steven Bryan
Copyright Date: 2010
Pages: 288
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  • Book Info
    The Gold Standard at the Turn of the Twentieth Century
    Book Description:

    By the end of the nineteenth century, the world was ready to adopt the gold standard out of concerns of national power, prestige, and anti-English competition. Yet although the gold standard allowed countries to enact a virtual single world currency, the years before World War I were not a time of unfettered liberal economics and one-world, one-market harmony. Outside of Europe, the gold standard became a tool for nationalists and protectionists primarily interested in growing domestic industry and imperial expansion.

    This overlooked trend, provocatively reassessed in Steven Bryan's well-documented history, contradicts our conception of the gold standard as a British-based system infused with English ideas, interests, and institutions. In countries like Japan and Argentina, where nationalist concerns focused on infant-industry protection and the growth of military power, the gold standard enabled the expansion of trade and the goals of the age: industry and empire.

    Bryan argues that these countries looked less to Britain and more to North America and the rest of Europe for ideological models. Not only does this history challenge our idealistic notions of the prewar period, but it also reorients our understanding of the history that followed. Policymakers of the 1920s latched onto the idea that global prosperity before World War I was the result of a system dominated by English liberalism. Their attempt to reproduce this triumph helped bring about the global downturn, the Great Depression, and the collapse of the interwar world.

    eISBN: 978-0-231-52633-3
    Subjects: History, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Tables
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
  5. Introduction Pasts Imperfect
    (pp. 1-14)

    The financial panic of 2008 marked at least a temporary interruption in the market fundamentalism that emerged out of the 1970s in Anglo-American society. But this idealized view of markets and classic English economics was, and remains, immensely influential. Its influence has been particularly strong as applied to ideas of globalization and global economic history.

    In the years after the fall of the Berlin Wall it became common in Anglo-American society to look toward the turn of the twentieth century as a globalized mirror of the present. This mirror image served not only as historical déjà vu but also as...

  6. Part I Gold and the Late Nineteenth-Century World
    • 1 The Late Nineteenth-Century World
      (pp. 17-31)

      In the early nineteenth century Britain emerged as the predominant political and economic actor of its age. The Industrial Revolution of the late eighteenth and early nineteenth century, the end of Napoleon’s military dominance on the European continent in the 1810s, and Britain’s use of military and economic means to cobble together trade and colonial centers all contributed to Britain’s global power and influence. This influence peaked during the 1850s and 1860s, giving way to a relative decline vis-à- vis other countries in the last quarter of the nineteenth century.¹

      The economic side of this so-called Pax Britannica of relative...

    • 2 National and International Money
      (pp. 32-41)

      The gold standard as it developed worldwide at the turn of the twentieth century was not the first use of international money. For centuries, trade and the precious metals to pay for it had passed through various lands as a matter of course. With the establishment of European trade and colonies in the Americas in the 1500s, silver from Latin American mines joined silver from Asia as the de facto currency of international commerce. It remained so through the early nineteenth century.¹

      But the changed ideological and institutional context of the late nineteenth century made the expansion of the gold...

    • 3 Nations and Gold
      (pp. 42-56)

      New nations came to adopt the gold standard in the late nineteenth century for similar reasons, drawing from a common pool of economic, political, and cultural ideas and interests. Above all, the ideas of the age were nationalistic. But the particular weight of these elements varied from country to country. Their influence on adoption of the gold standard varied as well.

      This did not mean that all policymakers necessarily saw their national interests in the same way. Different policymakers had different ideas of what the national interest meant to their country. Nor did they necessarily use the same tools to...

  7. Part II Industry and Argentine Money
    • 4 Gold and Industrial Developmentalism
      (pp. 59-74)

      The neoliberal Pax Britannica tale of the late nineteenth century has tended to turn Argentina into an informal adjunct—even an informal colony—of the British Empire. But contemporary Argentines were far more selective in their use of market principles and British ideas and institutions than this image implies.

      Like the United States, Argentina emerged in the nineteenth century as a self-consciously new nation with a particular vision of its role in the Western Hemisphere, its roots in Europe, and an ostensibly limitless future. Residents of what would become Argentina rebelled against the Spanish Empire in the first decade of...

    • 5 Strange Bedfellows
      (pp. 75-86)

      The surface incongruity of paper currency enthusiasts rallying to the gold standard, and gold enthusiasts attacking it, was not the only oddity in the lineup of supporters and opponents of the Argentine gold standard.

      The breakdown reflected competition between the two main economic models of the time: free trade and inclusion as a primary products supplier within the British trading system versus protectionism and industrial promotion. British dominions such as Canada and Australia followed the first model. Formal and informal colonies followed this model as well, though rarely by choice. Countries such as the United States and Germany that sought...

    • 6 Law 3871 and the Gold Standard
      (pp. 87-110)

      After World War I Pellegrini’s currency plan was commonly described as Argentina’s adoption of the gold standard, with “gold standard” carrying the meaning assigned to it in nineteenth-century Britain and classic English liberal theory.

      This meant the full collection of free trade, free capital lows, automatic adjustment, laissez-faire, hard money, antiinlation, procreditor, and probanker policies revolving around a set exchange rate presumably immutable to change and free from government devaluation. This was the image the gold standard acquired in the market fervor of the 1920s. This was also the image of the gold standard in the years before World War...

  8. Part III The Meiji Gold Standard
    • 7 The Meiji Gold Standards
      (pp. 113-133)

      Currency in Meiji Japan (1868–1912) was not only a matter of commerce and state-guided industrialization as it was in Argentina. It was also an issue of military might. In Meiji Japan, as in Argentina, progress and civilization became matters of state concern. But in Japan this concern carried diplomatic and military meaning absent in Argentina.¹ In Japan, government policy from the 1870s concerned itself with the concept of “rich nation, strong army” ( fukoku kyōhei )—industrial promotion and military expansion. Acting within an age of empire, Japanese leaders aimed first at preventing colonization by the West and, then,...

    • 8 Industry and the Economic Uses of Gold
      (pp. 134-150)

      Although part of the economic appeal of the gold standard in Japan rested on the idea that gold was more stable than silver, this idea coexisted with two other arguments. The first argument emphasized gold’s instability rather than its stability. the second argument had nothing to do with inherent stability at all; instead, it concerned institutional context.

      The first argument sought to lock in the trade benefits of a depreciating currency: export promotion and import substitution. This differed little from the goals of industrial promoters in Argentina. Japanese merchants and industrialists sought to adopt gold in the belief that gold...

    • 9 Empire and the Political Uses of Gold
      (pp. 151-173)

      Economic arguments about stability, industrial promotion, and world standards dominated discussions about the gold standard among merchants and industrialists. Among government officials and those concerned more with politics than economics another set of arguments emerged. These explicitly political arguments took precedence after Japan’s victory in the Sino-Japanese War of 1894–95.

      These political arguments consisted of psychological appeals to gold representing a particular level of civilization or great power development. This implied a particular level of international political and military power. These political arguments also emphasized more practical considerations concerning military development and imperial management. In particular these focused on...

  9. Epilogue The Rules of Globalization
    (pp. 174-188)

    Prominent in the market euphoria of the late twentieth and early twenty-first century was a line of thinking that found the years before World War I analogous to the present. In this view, the turn of the twentieth century marked an earlier age of market dominance and laissez-faire triumph. The 1990s and early 2000s meant a hundred-year delayed return to a past of laissez-faire, neoclassical economics, and English liberal ideals.

    This is a story with immense appeal for those who prefer that governments not take an explicit role in the economy. In practice, this reluctance comes down to opposition to...

  10. Notes
    (pp. 189-224)
  11. References
    (pp. 225-254)
  12. Index
    (pp. 255-274)