From Bretton Woods to World Inflation

Introduction

The purpose of this book is to re-examine the consequences of the decisions made by the representatives of the forty-five nations at Bretton Woods, New Hampshire, forty years ago. These decisions, and the institutions set up to carry them out, have led us to the present world monetary chaos. For the first time in history, every nation is on an inconvertible paper money basis. As a result, every nation is inflating, some at an appalling rate. This has brought economic disruption, chronic unemployment, and anxiety, destitution, and despair to untold millions of families.

It is not that inflation had not occurred before the Bretton Woods Conference in July, 1944. Inflation’s widespread existence at the time, in fact, was the very reason the conference was called. But at that meeting, chiefly under the leadership of John Maynard Keynes of England, all the wrong decisions were made. Inflation was institutionalized. And in spite of the mounting monetary chaos since then, the world’s political officeholders have never seriously re-examined the inflationist assumptions that guided the authors of the Bretton Woods agreements. The main Institution set up at Bretton Woods, the International Monetary Fund, has not only been retained, its inflationary powers and practices have been enormously expanded.

Yet this book would never have been put together had it not been for the encouragement and initiative of my friends, Elizabeth B, Currier, Executive Vice President of the Committee for Monetary Research & Education, and George Koether. We were talking about the current world monetary chaos, and one of them referred to the possible role played by the monetary system set up at Bretton Woods. I happened to remark that when the conference was taking place I was an editor on The New York Times, that I was writing nearly all its editorials on the Bretton Woods decisions as they were being daily reported, and that in them I was constantly calling attention to the inflationary consequences those successive decisions would lead to.

Both Mr. Koether and Mrs. Currier immediately suggested that it might serve a useful purpose to reprint some of these editorials now. I told them I had long ago sent my New York Times scrapbooks, together with other papers, to the George Arents Research Library in Syracuse University, and that the scrapbooks were the only place I knew of where these editorials had been identified as mine. George Koether undertook to make the trip to Syracuse, studied the scrapbooks, and sent me photostats of 26 of them. The thoroughness of his research is shown by the fact that these included not only Times editorials of mine which appeared between June 1, 1944 and April 7, 1945, but one that was published on the virtues of the gold standard on July 9, 1934. His discrimination was such that I am confident he did not miss a single essential comment. Of the 26 editorials he sent, I am reprinting 23. I am greatly in debt to his selective judgment.

I feel that these editorials do warrant republication at this time, not to prove that my misgivings turned out to be justified, but to show that if sound economic and monetary understanding had prevailed in 1945 at Bretton Woods, and in the American Congress and Administration, these inflationary consequences would have been recognized, and the Bretton Woods proposals rejected.

When I began to re-read these old New York Times editorials I was reminded that I had summarized all the misgivings expressed in them in an article in The American Scholar of Winter, 1944/5, under the title “The Coming Economic World Pattern: Free Trade or State Domination?” I republish that here also. And once I had begun the brief history that follows of the actual workings of the Bretton Woods institutions, particularly The International Monetary Fund, I decided to include five other pieces: (1) excerpts from my book Will Dollars Save The World? which appeared in 1947; (2) a column in Newsweek magazine of Oct. 3, 1949, on the devaluation of the British pound and twenty-five other world currencies in the two weeks preceding; (3) my column for the Los Angeles Times Syndicate, Nov. 21, 1967, “Collapse of a System;” (4) another column for the Los Angeles Times Syndicate of March 23, 1969, “The Coming Economic Collapse,” which predicted that the United States would be forced off the gold standard—an event that actually took place on Aug. 15, 1971; and (5) an article in The Freeman, August, 1971, entitled “World Inflation Factory,” calling attention once more to “the inherent unsoundness of the International Monetary Fund system.”

All of these pieces and their predictions show that the monetary chaos and world inflation could have been stopped, or at least greatly diminished, in 1971, in 1969, in 1949, or even in 1944, if those in positions of power had really understood what they were doing and had combined that understanding with even a minimum of political courage and responsibility.

I wish to express my thanks here to The New York Times, The American Scholar, The Foundation for Economic Education, Newsweek, The Los Angeles Times Syndicate, and The Freeman for giving me permission to republish these articles.

In my editorials for The New York Times, the understatement of the case against the defects of the Bretton Woods agreements was deliberate, because I had always to bear in mind that I was writing not in my own name but that of the newspaper. For one example: in the effort not to seem “extreme”, I looked for mitigating merits, and was far too kind to the proposed International Bank, simply because, unlike the Fund, it was not called upon to make enormous loans automatically, but allowed to exercise some discretion. The article setting it up even went so far as to stipulate that a committee selected by the Bank must learn whether a would-be borrower was “in a position to meet its obligations!”

Yet obvious as these dangers should have been, even in 1944, to those who bothered to read the text of the Bretton Woods agreements, I found myself almost alone, particularly in the journalistic world, in calling attention to them. (My editorials mentioned at the time the few persons and groups who did.) Even today, nearly forty years later, and twelve years after the agreements collapsed from their inherent infirmities, we hear journalistic pleas for their restoration. Even the usually perceptive Wall Street Journal published an editorial as late as June 22, 1982, entitled “Bring Back Bretton Woods.” It may be said in extenuation that the editorial writer was comparing the situation in 1982, when inconvertible paper currencies were daily depreciating nearly everywhere, with the comparatively stable exchange rates for the 25 years before Bretton Woods openly collapsed in August, 1971, when President Nixon closed the American gold window. But The Wall Street Journal forgot that Bretton Woods worked as intended as long as it did only by putting an excessive burden and responsibility on one nation and one currency.

Another and perhaps more typical example of the confusion on this subject that still prevails in the journalistic world today, appeared in a column by Flora Lewis in The New York Times of October 19, 1982, entitled “A World Reserve Plan.” She began by praising the original Bretton Woods scheme as “a way of admitting that nobody could go it alone and prosper any longer.” She then offered a complicated mis-explanation of what had gone wrong since then, and ended by suggesting that the real trouble was that President Reagan was preventing the International Monetary Fund from lending even more billions to already bankrupt debtors.

Let us, at the cost of repetition, remind ourselves of what really went wrong. The Bretton Woods agreements never seriously considered the return of each signatory nation to a gold standard. Lord Keynes, their principal author, even boasted that they set up “the exact opposite of a gold standard.” In any case, what Bretton “Woods really set up was what used to be called a “gold-exchange” standard. Every other country in the scheme undertook simply to keep its own currency unit convertible into dollars. The United States alone undertook (on the demand of foreign central banks) to keep its own currency unit directly convertible into gold.

Neither the politicians of foreign countries, nor unfortunately of our own, realized the awesome responsibility that this scheme put on the American banking and currency authorities to refrain from excessive credit expansion. The result was that when President Nixon closed the American gold window on August 15, 1971, our gold reserves amounted to only about 2 per cent of our outstanding currency and demand and time bank deposits ($10,132 million of gold vs. $454,500 million of M2). In other words, there was only $2.23 in gold to redeem every $100 of paper promises. But this takes no account of outstanding “Eurodollars,” or even of the outstanding currency and bank deposits of all the foreign signatories to Bretton Woods. The ultimate gold reserves on which the conversion burden could legally fall under the system must have been only some small fraction of 1 per cent of the total paper obligations against them. Even if the American Congress, and our own banking and currency authorities, had acted far more responsibly, the original Bretton Woods system was inherently impossible to maintain.

A gold-exchange standard can be workable if only a few small countries resort to it. It cannot indefinitely operate when nearly all other countries try to depend on just one for ultimate gold convertibility.

The Bretton Woods system continues to do great harm because the dollar, though no longer based on gold and itself depreciating, continues to be used {as of this writing) as the world’s primary reserve currency, while the institutions it set up, like the International Money Fund and the Bank, continue to make immense new loans to irresponsible and improvident governments.

Let us now look chronologically at the world monetary developments of the last forty years. The representatives-of some forty-five nations conferred at Bretton Woods from July I to July 22, 1944, and drafted Articles of Agreement. It was not until December, 1945, that the required number of countries had ratified the agreements; and not until March 1, 1947, that the International Monetary Fund (IMF), the chief institution set up by the agreements, began financial operations at its headquarters in Washington, D. C.

The ostensible purpose of the IMF was “to promote international monetary cooperation.” The chief way it was proposed to do this was to have all the member nations make a quota of their currencies available to be loaned to those member countries “in temporary balance of payment difficulties.” The individual nations whose currencies were to be made available were not themselves to decide how large their loans to the borrowing nations should be, nor the period for which the loans were to be made.

This decision was and is, in fact, made by the international bureaucrats who operate the IMF. How these officials decide that these balance of payment problems are merely “temporary” I do not know. In any case, the “temporary” loans normally have run from one to three years. Until recently, the loans were made almost automatically, at the request of the borrowing nation.

It should be obvious on its face that this whole procedure is unsound. It is possible, of course, that a nation could get into balance-of-payments difficulties through no real fault of its own—because of an earthquake, a long drought, or being forced into an essentially defensive war. But most of the time, balance-of-payments difficulties are brought about by unsound policies on the part of the nation that suffers from them. These may consist of pegging its currency too high, encouraging its citizens or its own government to buy excessive imports; encouraging its unions to fix domestic wage rates too high; enacting minimum wage rates; imposing excessive corporation or individual income taxes (destroying incentives to production and preventing the creation of sufficient capital for investment); imposing price ceilings; undermining property rights; attempting to redistribute income; following other anti-capitalistic policies; or even imposing outright socialism. Since nearly every government today—particularly of “developing” countries—is practicing at least a few of these policies, it is not surprising that some of these countries will get into “balance-of-payment difficulties” with others.

A “balance-of-payments difficulty”, in short, is most often merely a symptom of a much wider and more basic ailment. If nations with “balance-of-payments” problems did not have a quasi-charitable world government institution to fall back on and were obliged to resort to prudently managed private banks, domestic or foreign, to bail them out, they would be forced to make drastic reforms in their policies to obtain such loans. As it is, the IMF, in effect, encourages them to continue their socialist and inflationist course. The IMF loans not only encourage continued inflation in the borrowing countries, but themselves directly add to world inflation. (These loans, incidentally, are largely made at below-market interest rates.)

But the Fund has increased world inflation in still another way, not contemplated in the original Articles of Agreement of 1944. In 1970, it created a new currency, called “Special Drawing Rights” (SDRs). These SDRs were created out of thin air, by a stroke of the pen. They were created, according to the Fund, “to meet a widespread concern that the growth of international liquidity might be inadequate” (A Keynesian euphemism for not enough paper money).

These SDRs, in the words of the IMF, were allocated to members—at their option—in proportion to their quotas over specified periods. During the first period, 1970-72, SDR 9.3 billion was allocated. There were no further allocations until January 1, 1979. Amounts of SDR 4 billion each were allocated on January 1, 1979, on January 1, 1980, and January 1, 1981. SDRs in existence now [April, 1982] total SDR 21.4 billion, about 5 per cent of present international non-gold reserves.

In view of the ease with which this fiat world money was created, its limited volume (even though in excess of SDRs 20 billion) may strike many people as surprisingly moderate. But its creation, as we shall see, set an ominous precedent.

I should define more specifically just what an SDR is. From July, 1974, through December, 1980, the SDR was valued on the basis of the market exchange rate for a basket of the currencies of the 16 members with the largest exports of goods and services. Since January, 1981, the basket has been composed of the currencies of the five members with the largest exports of goods and services. The currencies and their weights in the basket are the U. S. dollar (42 per cent), the deutsche mark (19 per cent), and the yen, French franc, and pound sterling (13 per cent each).

The SDR serves as the official unit of account in keeping the books of the IMF. It is designed, in the words of the Fund, to “eventually become the principal asset of the international monetary system.”

But it is worth noting a few things about it. Its value changes every day in relation to the dollar and every other national currency. (For example, on August 25, 1982, the SDR was valued at $1.099 and six days later at $1.083.) More importantly, the SDR, composed of a basket of paper currencies, is itself a paper unit governed by a weighted average of inflation in five countries and steadily depreciating in purchasing power.

A number of countries have pegged their currencies to the SDR—i.e., to a falling peg. Yet the IMF boasts that it is still its policy “to reduce gradually the monetary role of gold,” and proudly points out that from 1975 to 1980 it sold 50 million ounces of gold—a third of its 1975 holdings. The U.S. Treasury Department can make a similar boast. What neither the Fund nor the American Treasury bother to point out is that this gold has an enormously higher value today than at the time the sales were made. The profit has gone to world speculators and other private persons. The American and, in part, the foreign taxpayer has lost again.

To resume the history of the Bretton Woods agreements and the IMF: Because the Fund was created on completely mistaken assumptions regarding what was wrong and what was needed, its loans went wrong from the very beginning. It began operations on March 1, 1947. In a book published that year, Will Dollars Save the World1, I was already pointing out (pp. 81-82) that:

The [International Monetary] Fund in its present form ought not to exist at all. Its managers are virtually without power to insist on internal fiscal and economic reforms before they grant their credits. A $25 million credit granted by the fund to France, for example, is being used to keep the franc far above its real purchasing power and at a level that encourages imports and discourages exports. This merely prolongs the unbalance of French trade and creates a need for still more loans. Such a use of the resources of the Fund not only fails to do any good, but does positive harm.

This loan and its consequences were typical. Yet on Dec. 18, 1946, the IMF contended that the trade deficits of European countries “would not be appreciably narrowed by changes in their currency parities.”

The countries themselves finally decided otherwise. On Sept. 18, 1949, precisely to restore its trade balance and “to earn the dollars we need,” the government of Great Britain slashed the par value of the pound overnight from $4.03 to $2.80. Within a single week twenty-five nations followed its example was largely the existence of the IMF and its misguided lending that had encouraged a continuance of pernicious economic policies on the part of individual nations—and still does.

Let us now take another jump forward in our history. In a column published on March 23, 1969, “The Coming Monetary Collapse”, I predicted that: “The international monetary system set up at Bretton Woods in 1944 is on the verge of breaking down,” and “one of these days the United States will be openly forced to refuse to pay out any more of its gold at $35 an ounce even to foreign central banks.” This actually occurred two-and-a-half years later, on Aug. 15, 1971.

The fulfillment of this prophecy did not mean that I was the seventh son of a seventh son. I simply pointed in detail to the conditions already existing in March, 1969, that made this outcome inevitable. But next to no one in authority was paying or calling any attention to these conditions—no one except a negligible few.

Since the United States went off gold, and some of the results have become evident, most of the blame for that action (on the part of those who already believed in the gold standard or have since become converted to it) has been put on President Nixon, who made the announcement. He doubtless deserves some of that blame. But the major culprits are those who set up the Bretton Woods system and those who so uncritically accepted it. No single nation’s currency could long be expected to hold up the value of all the currencies of the world. Even if the United States had itself pursued a far less inflationary policy in the twenty-seven years from 1944 to 1971, it could not be expected indefinitely to subsidize, through the IMF, had itself pursued a far less inflationary policy in the twenty-seven years from 1944 to 1971, it could not be expected indefinitely to subsidize, through the IMF, the International Bank, and gold conversion, the inflations of other countries. The world dollar-exchange system was inherently brittle, and it broke.

So today we have depreciating inconvertible paper currencies all over the world, an unprecedented situation that has already caused appalling anxiety and human misery. Yet the supreme irony is that the Bretton Woods institutions that have failed so completely in their announced purpose, and led to only monetary chaos instead, are still there, still operating, still draining the countries with lower inflations to subsidize the higher inflations of others.

Yet to describe exactly what the IMF has done up to the present moment is not easy to do in non-technical terms. The Fund has its own jargon. Its books are kept in Special Drawing Rights (SDRs) which are artificial entries and nobody’s pocket money. Its loans are seldom called loans but “purchases,” because a country uses its own money unit to “buy,” through the IMF, SDRs, dollars, or any other national currencies. Repayments to the Fund are called “repurchases of purchases.”

So, as of Sept. 30, 1982, total purchases, including “reserve tranche” purchases, on the IMF’s books since it began operations have amounted to SDR 66,567 million (U.S. $71,879 million). Again, as of Sept. 30, 1982, total repurchases of purchases amounted to SDR 36,744 million,

The total amount of loans outstanding as of Sept. 30, 1982, was SDR 16,697 million (U.S. $18,020 million). The leading half-dozen borrowers were: India, SDR 1,766 million; Yugoslavia, SDR 1,469 million; Turkey, SDR 1,346 million; South Korea, SDR 1,148 million; Pakistan, SDR 1,079 million; and the Philippines, SDR 780 million—a total of SDR 7,588 million or $8,193 million in U.S. currency.

The future, of course, can only be guessed at, but the outlook is ominous. A sobering glance ahead was published in The New York Times of Jan. 9, 1983. The IMF’s total outstanding loans had then risen to $21 billion. The executive directors of the Fund had just approved a $3.9 billion loan designed as an emergency bailout of the near bankrupt Mexico. The Fund had also agreed to a similar package for Argentina. One for Brazil had been almost completed. Lined up for further help from the Fund, which already had loans out to thirty-three hard-pressed countries, were Chile, the Philippines, and Portugal.

Many had feared in the fall of 1982 that Mexico would simply refuse to make payments on its $85 billion foreign debt, thereby creating an even worse international financial crisis. So the Managing Director of the IMF, the Frenchman Jacques de Larosiere, before making the loan, warned the private banks that had already lent billions to Mexico that unless they came up with more, they might find themselves with nothing at all. He met a delegation representing 1,400 commercial banks with loans out to Mexico. Before one additional cent would be put up by the IMF, he told them, the private banks would have to roll over $20 billion of their credits to Mexico maturing between August, 1982, and the end of 1984, and extend $5 billion in fresh loans. Similar conditions were later attached to the Fund’s loans to Argentina and Brazil.

So the IMF is now using its loans as leverage to force the extension of old and the making of new private loans. All this may seem momentarily reassuring. At least it tries to put the main part of the future burden and risk on the imprudent past private lenders (and their creditors in turn) rather than on the world’s taxpayers and national currency holders.

But what is all this leading to? May it not consist merely of throwing good money after bad? How long can the international jugglers keep the mounting unpaid debt in the air?

They cannot be blamed for not making a new try. On Jan. 17, 1983, senior monetary officials from 10 major industrial nations (the Group of 10, formed in 1962) agreed to make available a $20 billion emergency fund to help deeply indebted countries. As reported in The New York Times of Jan. 18, 1983:

The new fund is to be established by tripling the Group of 10’s current commitment to lend the IMF an additional $7 billion whenever it runs short of money and by relaxing the rules under which this aid is provided. ... Major industrial governments also plan to increase the IMF’s own lendable capital this year by about 50 per cent, to $90 billion. The government authorities hope that private banks then would also help these countries by agreeing to delay debt payments and providing more credit so the poorer countries would not be forced to curb imports and thus deepen the world recession.

Thus, the rescuing governments plan to throw still more money at near-bankrupt countries to encourage them to continue the very policies of over-spending that brought on their predicament.

In an editorial on January 25, 1983, The Wall Street Journal commented: “What started out as a relatively modest effort to increase international monetary reserves is turning into an all-out assault on the U.S. Treasury—led by the Secretary of the Treasury himself.”

The prospect is made even more disturbing when one looks about in vain among the world’s statesmen or putative financial leaders for anyone with a clear proposal for bringing the increasing expansion of credit to an end. The present American Secretary of the Treasury, Donald T. Regan, for example, is reported to be “worried that too much IMF induced austerity could bring about even sharper contractions in world economic activity”.

And among the influential politicians in office today he is not alone, but typical. In 1971, when President Nixon was imposing wage and price controls, he said: “We are all Keynesians now.” He was not far wrong. Even politicians who do not consider themselves inflationists are afraid to advocate bringing inflation to a halt. They merely recommend stowing down the rate. But doing this would at best prolong and increase depression where it already exists and prolong and increase the consequent unemployment. It would be like trying to reduce a man’s pain by cutting off his gangrenous leg a little bit at a time.

In order for inflation, once begun, to continue having any stimulative effect, its pace must be constantly accelerated. Prices and purchases must turn out to be higher than expected. The only course for a government that has begun inflating, if it hopes to avoid hyper-inflation and a final “crack-up boom”, is to stop inflating completely, to balance its budget without delay, and to make sure its citizens understand that this is what it is doing.

This would, of course, bring a crisis, but much less net damage than a policy of gradualism. As the Nobel laureate F. A. Hayek said recently2 in recommending a similar course: “The choices are 20 per cent unemployment for six months or 10 per cent unemployment for three years.” 1 cannot vouch for his exact percentage and time-span guesses, but they illustrate the kind of alternative involved in the choice.

To resume our history: On Feb. 12, 1983, the IMF approved an increase in its lending resources of 47.4 per cent to a total of $98.9 billion, the largest increase proposed in its history.

Some commentators began pointing out that the IMF was already holding gold at a market value of between $40 and $50 billion, second only to the holdings of the U.S. government, and suggested it might start selling off some of this gold to raise the money to make its intended new loans.

On April 4, William E. Simon, the former U.S. Secretary of the Treasury, now free to express his personal opinion frankly, wrote in an article in The Wall Street Journal:

We are witnessing the tragic spectacle of the deficit-ridden rescuing the bankrupt with an outpouring of more American red ink—and the taxpayer is left holding the bag....By extending credit to countries beyond their ability to repay, the final bankruptcy is worse.... There is no point to a bailout that increases world debt when the problem is too much indebtedness already. Countries are in trouble because they cannot service their current obligations. The strain on them is not eased by a bailout that loads them up with more-

I may add my own comment that government-to-government loans made through an international pool reverse all normal incentives. These loans go mainly to the countries that have got themselves into trouble by following wasteful and anti-capitalistic policies—policies which the loans themselves then encourage and enable them to continue.

When governments are obliged to turn to private lenders, the latter will usually insist on policies by the borrowing governments that will enable the loans to be repaid. There has recently been an outbreak of justifiable criticism of private banks for making improvident loans to Third World countries. What has been until very recently overlooked is that it is precisely because these private banks have been counting on the IMF to bail them out in case of default that a great part of these dubious loans were made.”

On May 9, 1983, President Mitterrand of France called for a conference “at the highest level” to reorganize the world monetary system. “The time has really come,” he said, “to think in terms of a new Bretton Woods.” He forgot that it was precisely because under the old Bretton Woods system American gold reserves were drawn upon and wasted, among other things to keep the paper franc far above its market level, that the system broke down. Only a return to a genuine international gold standard (and not a pretence of one accompanied by a multitude of national inflations) can bring lasting world currency stability.

On June 8 the Senate approved the bill to increase the IMF’s lending resources by a total of $43 billion, with an increase of $8.4 billion in the contribution of the U.S. On August 3 the House passed a similar bill, with more restrictive amendments. But Congressmen Ron Paul of Texas declared: “The total U.S. commitment in H.R. 2957 is about $25 billion, not merely the $8.4 billion for the IMF, as one might be led to believe by the press.”

But even before the bill was passed, some international bankers were predicting that the additional appropriation would not be enough. On Nov. 18, 1983, in the last day of its session, Congress finally passed a compromise bill, along with a slue of other legislation, increasing the American contribution to the IMF by $8.4 million. But it attached an irrelevant rider authorizing $15.6 billion for subsidized housing programs, so that the President would be forced to approve this expenditure also.

Let us take a look at the international debt situation as it stands at the moment of writing this. The demand for increased lending by the IMF and other institutions arose in the fall of 1982 because of the huge debts of Mexico, Argentina and other Latin American countries. In the twelve months following, commercial banks around the world renegotiated repayment terms for $90 billion worth of debt owed by fifteen countries. This was twenty times more than the amount restructured in any previous year, according to a study by the Group of Thirty, an international economic research body. Yet on Sept. 5, 1983, The New York Times published the following table:

Latin America’s Debt

In billions of dollars

	Total Debt	Debt Owed U.S. Banks
Argentina	$36.5	$8.6
Brazil	86.3	22.0
Chile	17.2	5.9
Colombia	10.5	3.7
Ecuador	6.7	2.1
Mexico	84.6	24.3
Peru	11.6	2.4
Venezuela	32.6	11.2

Source: Morgan Guaranty Trust Company

The world cannot get back to economic sanity until the IHF is abolished. So long as it stands ready to make more bad loans, near-bankrupt countries will continue to go into further debt.

The Bretton Woods agreements, drafted in 1944, and the International Monetary Fund set up by them, were not the sole causes of the present world inflation. But they constituted a major contribution. They were built on the assumption that inflation—the continuous expansion of international paper credit, and the continuous making of loans by an international governmental institution—were the proper and necessary ways to “promote world economic growth.” This assumption was disastrously false, We will not stop the growth of world inflation and world socialism until the institutions and policies adopted to promote them have been abolished.

3The Foundation for Economic Education, Irvington-on-Hudson, New York. A 6500 word condensation of it was also published in the January, 1948 issue of The Reader’s Digest and in all its foreign issues of that month.

4Interview in Silver and Gold Report, end of December, 1982. (P.O.Box 325, Newtown, Conn. 06470)

• 1*The Foundation for Economic Education, Irvington-on-Hudson, New York. A 6500 word condensation of it was also published in the January, 1948 issue of The Reader’s Digest and in all its foreign issues of that month.
• 2*Interview in Silver and Gold Report, end of December, 1982. (P.O.Box 325, Newtown, Conn. 06470)
• 3Will Dollars Save the World*
• 4This would, of course, bring a crisis, but much less net damage than a policy of gradualism. As the Nobel laureate F. A. Hayek said recently* in recommending a similar course: “The choices are 20 per cent unemployment for six months or 10 per cent unemployment for three years.” 1 cannot vouch for his exact percentage and time-span guesses, but they illustrate the kind of alternative involved in the choice.