Murray N. Rothbard
The Monetary Breakdown of the West
Since the first edition of this book was written, the chickens of the monetary interventionalists have come home to roost. The world monetary crisis of February-March, 1973, followed by the dollar plunge of July, was only the latest of an accelerating series of crises which provide a virtual textbook illustration of our analysis of the inevitable consequences of government intervention in the monetary system. After each crisis is temporarily allayed by a "Band-Aid" solution, the governments of the West loudly announce that the world monetary system has now been placed on sure footing, and that all the monetary crises have been solved. President Nixon went so far as to call the Smithsonian agreement of December 18, 1971, the "greatest monetary agreement in the history of the world," only to see this greatest agreement collapse in a little over a year. Each "solution" has crumbled more rapidly than its predecessor.
To understand the current monetary chaos, it is necessary to trace briefly the international monetary developments of the twentieth century, and to see how each set of unsound inflationist interventions has collapsed of its own inherent problems, only to set the stage for another round of interventions. The twentieth century history of the world monetary order can be divided into nine phases. Let us examine each in turn.