,*APT] #ag ,CAPITAL ,=MATION & ,=EIGN ,TRADE ,PEOPLE 3 ,AU?OR 3 ,PAUL ,MATTICK ,TEXT 3 ,! 9CREAS+LY ORGANIZ$ *>ACT] ( ! MIX$ ECONOMY HAS 9DUC$ SOME ECONOMI/S & SOCIOLOGI/S TO SPEAK ( IT AS A 0PO/ CAPITALI/0 SY/EM4 ,! POSSIBILITY ( AN ORGANIZ$ CAPITALI/ ECONOMY EI!R PLEAS$ OR WORRI$ MANY SOCIAL !ORETICIANS BE=E - ,RUDOLF ,HILF]D+1.<#a.> MO/ NOTABLY1 5VISION$ A COMPLETELY ORGANIZ$ CAPITALISM BAS$ ON A CLASS-ANTAGONI/IC SY/EM ( DI/RIBUTION4 ,H[EV]1 A NONCOMPETITIVE CAPITALISM1 ?\< P]HAPS CONCEIVABLE ON A NATIONAL LEVEL1 IS QUITE 9CONCEIVABLE AS A WORLD-WIDE PH5OM5ON & = ?AT REASON C\LD BE ONLY P>TIALLY REALIZ$ ON A NATIONAL LEVEL4 ,:AT NATIONAL ECONOMIC ORGANIZATION !RE IS HAS >IAS 5 MA9LY 9 RESPONSE TO 9T]NATIONAL COMPETITION2 & ! MORE SU* ORGANIZATION HAS 5T]$ 9TO & TRANS=M$ ! M>KET ME*ANISM1 ! MORE *AOTIC & DE/RUCTIVE ! CAPITALI/ SY/EM HAS BECOME4 ,CAPITALI/IC PROP]TY RELATIONS PRECLUDE ANY EFFECTIVE =M ( SOCIAL ORGANIZATION ( PRODUCTION4 ,ONLY :]E !SE PROP]TY RELATIONS HAVE BE5 DE/ROY$1 AS = 9/ANCE 9 ,RUSSIA1 HAS IT PROV$ POSSIBLE TO HAVE SOME MEASURE ( C5TRAL ECONOMIC CONTROL4 ,BUT EV5 H]E1 ! *>ACT] ( ! PLANN$ ECONOMY IS /ILL DET]M9$ BY 9T]NATIONAL COMPETITION &1 TO ?AT EXT5T1 ITS ORGANIZ$ NATURE HELPS P]PETUATE ! G5]AL AN>*Y ( CAPITAL PRODUCTION4 ,AL?\< ,KEYNES' !ORY EVOLV$ \T ( ! CONSID]ATION ( A CLOS$ SY/EM1 IT HAD TO RELATE ITSELF TO ! REAL WORLD ( CAPITAL PRODUCTION4 ,KEYNES FELT ?AT BY 9SI/+ ON ! SELF NATURE ( ! M>KET1 LAISSEZ-FAIRE DOCTR9E CONDEMN$ SOCIETY TO DEPRESSIONS & ! DECL9E ( 9T]NATIONAL TRADE :I* !Y BR\-GAP AFT] ! ,SECOND ,WORLD ,W> & ! MORE REC5T PAYM5TS DIFFICULTIES ( ,5GL& & ! ,UNIT$ ,/ATES - NOT TO SPEAK ( ! RA!R P]MAN5T TRADE & PAYM5TS PROBLEMS ( ! CAPITALI/ICALLY UND]DEVELOP$ NATIONS4 ,= ,M>X IT WAS NOT TRADE BUT ! PROCESS ( CAPITAL ACCUMULATION :I* WAS ! S\RCE ( CAPITALI/IC CRISIS2 ! EXPANSION & CONTRACTION ( TRADE M]ELY EXPRESS$ ! NE$S ( ! PROCESS ( CAPITAL ACCUMULATION1 AS DID EXPANSION & CONTRACTION 9 O!R SPH]ES ( ECONOMIC ACTIVITY4 ,HE DID NOT %>E ! CLASSICAL ILLUSION ?AT 9T]NATIONAL FREE TRADE B5EFITS ALL NATIONS EQUALLY BY BR++ AB\T AN 9T]NATIONAL DIVISION ( LABOR 9 H>MONY ) BO? NATURAL CONDITIONS & ! ECONOMIC NE$S ( M54 ,M>X HELD ?AT ! 9T]NATIONAL DIVISION ( LABOR ?AT DEVELOP$ ?R\< TRADE WAS L>GELY DET]M9$ BY CAPITAL ACCUMULATION4 ,!RE=E1 0JU/ AS EV]Y?+ BECAME A MONOPOLY1 !RE >E ALSO SOME BRAN*ES ( 9DU/RY :I* PREVAIL OV] ALL O!RS1 & SECURE ! NATIONS :I* ESPECIALLY FAVOR !M ! COMM& ( ! M>KETS ( ! WORLD40.<#b.> ,?IS POSITION IS SIMULTANE\SLY AN EXPLOITATIVE POSITION4 ,M>X WAS NOT SURPRIS$ ?AT ! 0FREE-TRAD]S CANNOT UND]/& H[ ONE NATION CAN GR[ RI* AT ! EXP5SE ( ANO!R1 S9CE !SE SAME G5TLEM5 ALSO REFUSE TO UND]/& H[ 9 ! SAME C\NTRY ONE CLASS CAN 5RI* ITSELF AT ! EXP5SE ( ANO!R40.<#c.> ,HE DECL>$ HIMSELF 9 FAVOR ( FREE TRADE NONE!LESS1 = 9 HIS DAY1 0! PROTECTIVE SY/EM WAS CONS]VATIVE1 :ILE ! FREE TRADE SY/EM WORK$ DE/RUCTIVELY10 & 0C>RI$ ! ANTAGONISM ( PROLET>IAT & B\RGEOISIE TO ! UTT]MO/ PO9T4.<#d.>0 ,ECONOMIC DEVELOPM5T 0HAS BE5 A PROCESS ( GR[? FROM A C5T] 9 :I* ! C\NTRIES \TSIDE ! C5T] HAVE [$ !IR DEVELOPM5T 7& (T5 !IR V]Y EXI/5CE7 TO ! MOVEM5T ( FACTORS1 AS WELL AS ( GOODS1 FROM ! C5T]2 & ! C5T] C\NTRIES HAVE 9 TURN [$ !IR DEVELOPM5T PRIM>ILY TO ?IS MOVEM5T40.<#e.> ,UND] !SE CONDITIONS IT IS TRUE ?AT 9T]NATIONAL TRADE CON/ITUTES AN 0ECONOMIC GA940 ,H[EV]1 ! GA9 ACCRUES L>GELY & DISPROPORTION ALLY TO A FEW CAPITALI/ NATIONS & TRANS=MS ! WORLD M>KET 9TO !IR DOM9ION2 SO ?AT ! =TUNES ( ! 9T]NATIONAL M>KET DEP5D ON ! EXPANSION ( !SE FEW C\NTRIES OR1 AT TIMES1 ( A P>TICUL> NATION4 ,9 A WORLD )\T T>IFFS1 QUOTAS & O!R RE/RICTIONS1 TRADE FACES A DISCRIM9ATORY SITUATION1 = ! /R5G? ( DIFF]5T NATIONS V>IES ACCORD+ TO LEVEL ( PRODUCTIVITY1 DEGREE ( 9DU/RIAL DEVELOPM5T1 & POSSESSION ( NATURAL RES\RCES4 ,OV] A P]IOD ( TIME1 0,IF !RE >E DIV]G5T RATES ( GR[? ( PRODUCTIVITY1 ! TRADE WILL BE PROGRESSIVELY LESS FAVORABLE TO ! C\NTRIES LESS RAPIDLY ADVANC+ 9 PRODUCTIVITY40.<#f.> ,?US 0,FREE ,TRADE0 WAS ! WAT*WORD ( ! MORE ADVANC$ CAPITALI/ NATIONS1 & ! 0FREE-TRAD]S !MSELVES W]E ONLY CONC]N$ ) MAK+ TRADE FREE SO LONG A ?IS MEANT AN EXP&+ ECONOMY & A GR[+ WORLD M>KET4 ,?IS SPECIFIC FRE$OM ( TRADE1 9 TURN1 PREP>$ ! CONDITIONS = NEW WAVES ( PROTECTIONISM1 :I* EM]G$ AS SOON AS CAPITAL =MATION BEGAN TO DECL9E4 ,L>GE-SCALE & DIV]SIFI$ ECONOMIES >E LESS DEP5D5T ON ! EXT5SION ( 9T]NATIONAL TRADE ?AN >E MORE SPECIALIZ$ SMALL SCALE ECONOMIES4 ,! DEP5D5CE ( ! ,AM]ICAN ECONOMY UPON ! PRODUCTS ( O!R NATIONS IS RELATIVELY LIMIT$3 :AT O!R NATIONS PRODUCE CAN1 9 MO/ CASES1 ALSO BE PRODUC$ 9 ! ,UNITE ,/ATES2 & :AT CANNOT BE PRODUC$ CAN (T5 BE DISP5S$ ) OR REPLAC$ BY SUB/ITUTES4 ,( C\RSE1 ! L>GE-SCALE ECONOMIES WILL USE !IR 0AUT>*IC0 POSSIBILITIES ONLY 9 AN 0EM]G5CY SITUATION40 ,S9CE CAPITAL RECOGNIZES ONLY PR(ITABILITY AS A BORD] TO ITS EXPANSION4 ,BUT S9CE !SE ECONOMIES SUFF] LEA/ BY A DET]IORATION 9T]NATIONAL TRADE1 !Y CAN SET ! CONDITIONS UND] :I* IT C>RI$ ON4 ,& ?\< IT IS CLE> ?AT ! ECONOMIC ADVANTAGE =EIGN TRADE DOES NOT CONSI/ 9 GETT+ RID ( EXPORTS BUT 9 OBTA9+ ! MAXIMUM VALUE ( IMPORTS 9 EX*ANGE = !M1 C\NTRIES 9 ABSOLUTE NE$ ( IMPORTS >E (T5 =C$ TO 5GAGE 9 TRADE PRACTICES QUITE CONTR>Y TO !IR 0ECONOMIC 9T]E/S40 ,HAV+ ONE NATION 9 A MONOPOLI/IC POSITION 9 ! WORLD ECONOMY DOES NOT NECESS>ILY IMPAIR 9T]NATIONAL TRADE3 9DE$1 9 ! N9ETE5? C5TURY1 ,5GL&'S EXCEPTIONAL CAPITAL /R5G?1 ACCOMPANI$ BY L>GE CAPITAL EXPORTS1 FO/]$ TRADE4 ,YET /RUCTURAL *ANGES 9 WORLD CAPITALISM MAY AFFECT BO? CAPITAL ACCUMULATION & 9T]NATIONAL TRADE NEGATIVELY4 ,IT HAS (T5 BE5 SAID ?AT ,AM]ICA'S RELATIVELY LIMIT$ CAPITAL EXPORTS & ! L[ P]C5TAGE ( EXPORT$ GOODS TO TOTAL PRODUCTION TE/IFY TO H] LACK ( 0ECONOMIC IMP]IALISM02 & ?AT1 CONSEQU5TLY1 ,AM]ICAN COMPETITION CANNOT BE BLAM$ = ! ECONOMIC DIFFICULTIES BESETT+ ! WORLD4 ,FROM A CONSI/5TLY CAPITALI/IC PO9T ( VIEW1 H[EV]1 IT W\LD BE JU/ ?IS LACK ( 0ECONOMIC IMP]IALISM0 - :ATEV] ITS CAUSE - :I* W\LD ACC\NT = ! CONTRACTION ( ! WORLD M>KET4 ,DUR+ ! P]IOD FROM #ahg TO #a#i#a#c1 = EXAMPLE1 0,BRITA9 9VE/$ ABROAD AB\T TWO-FIF?S ( H] SAV+S1 I4E41 SOME?+ LIKE ONE-T5? ( H] 9COME4 ,BY #aiac H] =EIGN 9VE/M5TS1 EQUAL TO NE>LY F\R-N9?S ( H] HOME 9VE/M5TS REPRES5T$ ONE-?IRD ( ALL ,EUROPEAN 9VE/M5TS & CONTRIBUT$ ONE-T5? ( H] NATIONAL 9COME40.<#g.> ,EXPRESS$ 9 T]MS ( ! SCALE ( ! N[ DOM9AT+ ,AM]ICAN ECONOMY1 0! EQUIVAL5T W\LD BE AN ,AM]ICAN =EIGN 9VE/M5T ( AB\T @s#f BILLION YIELD+ @s#c BILLION A YE> 9COME & GR[+ SOME:AT LIKE @s#a#e BILLION A YE>40.<#h.> ,9/EAD1 ,UNIT$ ,/ATES PRIVATE =EIGN 9VE/M5TS AFT] ! ,SECOND ,WORLD ,W> W]E = A LONG TIME AT A RATE ( LESS ?AN @s#a BILLION A YE>1 REPRES5T+ LESS ?AN ONE-?IRD ( ONE P] C5T ( H] NATIONAL 9COME1 & ONLY SL[LY RIS+ TO @s#c BILLION 9 #aieg & TO @s#d4#e BILLION 9 ! YE>S !REAFT]4 ,! WORLD'S RECURR5T TRADE & PAYM5TS DILEMMA DATES BACK TO ! ,FIR/ ,WORLD ,W> & ACQUIR$ AN APP>5TLY 9SOLUBLE *>ACT] 9 ! WAKE ( ,WORLD ,W> ,I,I4 ,! CONSI/5TLY UNFAVORABLE TRADE & PAYM5TS POSITIONS ( ! ,EUROPEAN NATIONS W]E L>GELY ! RESULT ( ! TWO W>S1 :I* L$ TO ! LOSS ( MO/ ( !IR =EIGN HOLD+S1 !IR 9DEBT$NESS = ,AM]ICAN SUPPLIES1 & ! %R9KAGE ( !IR TRADITIONAL M>KETS4 ,! RELATIVE SC>CITY ( FOOD-/UFFS & RAW MAT]IALS DUR+ & AFT] ! W>S TURN$ ! T]MS ( TRADE AGA9/ ! ,EUROPEAN NATIONS4 ,! SITUATION WAS FUR!R AGGRAVAT$ BY ! DET]IORATION ( ,EA/-,WE/ TRADE :I* RESULT$ 9 P>T FROM POLITICAL *ANGES BUT 9 EV5 GREAT] P>T FROM ! 9DU/RIALIZATION ( C\NTRIES ?AT =M]LY HAD BE5 PRODUC]S ALMO/ EXCLUSIVELY ( PRIM>Y PRODUCTS4 ,AM]ICA'S DOM9AT+ POSITION 9 ! WORLD ECONOMY1 AS NOT ONLY ! L>GE/ 9DU/RIAL BUT ALSO ! L>GE/ AGRICULTURAL PRODUC]1 DISLODG$ /ILL FUR!R ! ALREADY PREC>I\S 09T]NATIONAL ECONOMIC BALANCE40 ,A PAYM5TS BALANCE MAY BE LO/ ?R\< COMMODITY EX*ANGE1 ?R\< CAPITAL MOVEM5TS1 OR ?R\< ! REQUIREM5TS ( W>4 ,DEFICIT C\NTRIES MAY BALANCE !IR =EIGN TRANSACTIONS 9 V>I\S WAYS4 ,!Y MAY DRAW UPON !IR =EIGN ASSETS & RES]VES4 ,!Y MAY ALT] !IR EX*ANGE-RATES1 !REBY AFFECT+ BO? IMPORTS & EXPORTS4 ,!Y MAY 5C\RAGE EXPORTS TO GA9 =EIGN EX*ANGE & DISC\RAGE ACTIVITIES ?AT LEAD TO A LOSS ( =EIGN EX*ANGE4 ,!Y MAY ALSO GET HELP 9 =M ( =EIGN CR$ITS & AID4 ,A TRADE & PAYM5TS BALANCE - BY ITSELF - MEANS ONLY ?AT1 & DOES NOT NECESS>ILY IMPLY HEAL?Y & PROSP]\S CONDITIONS4 ,A P]SI/5T IMBALANCE 9 =EIGN EX*ANGE TRANSACTIONS1 H[EV]1 PO9TS T[>DS ! DISSOLUTION ( ! M>KET SY/EM4 ,AFT] ! ,SECOND ,WORLD ,W>1 ,AM]ICA BECAME A CR$ITOR-NATION UNABLE TO COLLECT & ,EUROPE A CONGLOM]ATION ( DEBTOR-NATIONS UNABLE TO PAY4 ,BETWE5 #aidf & #a#i#e#b1 ! DEFICIT ( ! 0FREE0 NATIONS ) RESPECT TO ! ,UNIT$ ,/ATES ROSE TO AB\T @s#c#d BILLION4 ,SOME @s#d BILLION W]E COV]$ BY ,EUROPEAN GOLD & DOLL> RES]VES2 OV] @s#c BILLION BY ,AM]ICAN AID4 ,(FSET BY LOANS & GRANTS1 ,AM]ICA'S 0FAVORABLE BALANCE0 WAS PLA9LY FICTITI\S1 =1 AS A ,UNIT$ ,/ATES ,S5ATOR EXPRESS$ IT1 IT 0IS OBVI\SLY AN IMBECILITY TO ATTA* ! WORD 'FAVORABLE' TO A SITUATION 9 :I* ! \TGO EXCE$S ! 9COME44444 ,IT WAS UNFAVORABLE1 BUT UNAVOIDABLE1 9 ! YE>S :5 WE W]E A DEBTOR NATION & HAD TO %IP \T 9 S]VIC+ \R DEBT MORE ?AN WE RECEIV$4 ,WE >E N[ A CR$ITOR NATION & CONT9UE ?AT PRACTICE4 ,ANY?+ :I* EXP&S \R IMPORTS &_/OR DIM9I%ES \R EXPORTS T5DS TO MITIGATE \R SILLY PRACTICE ( %IPP+ ABO>D /UFF ?AT CAN'T BE PAID =40.<#i.> ,H[EV]1 ?IS 0SILLY PRACTICE0 REFLECT$ ! 9DISP5SABLE 9T]DEP5D5CY ( 9T]NATIONAL CAPITALISM4 ,REQUIR+ ! MA9T5ANCE ( PRIVATE 5T]PRISE SY/EMS ELSE:]E1 ,AM]ICA'S ECONOMIC =EIGN POLICY C\LD NOT FOLL[ ! RULES ( GOOD BUS9ESS4 ,CAPITALISM HAS ALWAYS BE5 AT ONCE A PRODUCTIVE & A DE/RUCTIVE SOCIAL SY/EM1 NOT ONLY 9 EV]YDAY COMPETITION1 BUT1 9 AN ACCEL]AT$ & CONC5TRAT$ =M1 9 TIMES ( CRISIS & W>4 ,! DE/RUCTION ( CAPITAL VALUES BO? 9 PEACEFUL COMPETITION & 9 COMPETITION BY WAY ( W> WAS 9/RUM5TAL 9 BR++ AB\T NEW UPSW+S 9 CAPITAL PRODUCTION4 ,TO S]VE AS 9/RUM5TS ACCUMULATION H[EV]1 ! DE/RUCTIVE ASPECTS ( CAPITAL PRODUCTION MU/ RETA9 A C]TA9 DEF9ITE RELATION%IP TO ITS PRODUCTIVE P[]S4 ,! DE/RUCTION ( CAPITAL VALUES 9 A DEPRESSION AFFECTS ONLY AN AM\NT ( CAPITAL 9 ITS PHYSICAL =M4 ,! MAT]IAL PRODUCTIVE APP>ATUS REMA9S L>GELY 9TACT2 IT IS M]ELY CONC5TRAT$ 9TO FEW] H&S4 ,W>1 ON ! O!R H&1 DE/ROYS CAPITAL 9 BO? ITS PHYSICAL & ITS VALUE =M2 & IF TOO MU* IS DE/ROY$ 9 ITS MAT]IAL =M1 ! SURVIV+ CAPITALS F9D !MSELVES ?R[N BACK TO AN 0E>LI]0 /AGE ( CAPITAL DEVELOPM5T 9 :I* !IR [N ADVANC$ *>ACT]I/ICS BECOME AN ANA*RONISM4 ,BECAUSE !IR [N PR(ITS >E B\ND UP ) A DEF9ITE MASS ( WORLD PRODUCTION1 TOO GREAT A R$UCTION ( ! LATT] IS LIKELY TO R$UCE ! SURVIV+ CAPITALS' [N PR(ITABILITY4 ,! DISPROPORTIONALTIES CAUS$ BY ! DE/RUCTION & DISLOCATIONS ( W> MU/ BE OV]COME BE=E ! G5]AL PROCESS ( CAPITAL ACCUMULATION CAN AGA9 PROCE$4 ,! ,UNIT$ ,/ATES' FAVORABLE BALANCE ( TRADE 9 #aidh WAS @s#e4#e BILLION & H] PRODUCTION 9 ! SAME YE> EXCE$$ ?AT ( #aicg BY #g P] C5T4 ,! DEFICIT ( ! ,M>%ALL ,PLAN C\NTRIES WAS @s#e4#a BILLION & !IR PRODUCTION WAS /ILL BEL[ ! PRE-W> LEVEL4 ,!IR %>E 9 ,AM]ICAN IMPORTS HAD DROPP$ FROM #b P] C5T ( ! ,AM]ICAN GROSS NATIONAL PRODUCT AT ! TURN ( ! C5TURY TO LESS ?AN 4#e P] C5T 9 #a#i#d#h4 ,UND] SU* CONDITIONS1 ! TRADE & PAYM5TS QUE/ION C\LD NOT BE LEFT TO ! VICISSITUDES ( M>KET EV5TS4 ,! UNBUS9ESSLIKE PROC$URE ( %IPP+ MORE \T 9 AID ?AN WAS RECEIV$ BY WAY ( TRADE WAS UNAVOIDABLE4 ,9T]NATIONAL CAPITAL MOVEM5TS AFT] ! ,SECOND ,WORLD ,W> W]E DOM9AT$ BY ! ,UNIT$ ,/ATES1 & MO/ ( ! ,AM]ICAN FL[ CONSI/$ ( GOV]NM5T FUNDS4 ,AM]ICAN AID 5ABL$ ,EUROPEAN GOV]NM5TS TO ADOPT MU* MORE EXPANSION>Y PROGRAMS ( RECOV]Y ?AN W\LD O!RWISE HAVE BE5 POSSIBLE4 ,?IS AID WAS AN EXT5SION ( GOV]NM5T-9DUC$ PRODUCTION TO ! 9T]NATIONAL SC5E4 ,JU/ AS GOV]NM5T-9DUC$ PRODUCTION 9 ! DOME/IC ECONOMY IS 9T5D$ TO SECURE ?AT AM\NT ( ECONOMIC ACTIVITY CONSID]$ NECESS>Y = SOCIAL /ABILITY1 SO GOV]NM5T AID TO =EIGN NATIONS F9DS ITS RATIONALE 9 ! 9ESCAPABLE NE$ TO SU/A9 ! PRIVATE-5T]PRISE SY/EM ABROAD4 ,9 BO? CASES1 IT IS EXPECT$ ?AT CURR5T NON-PR(ITABLE EXP5DITURES WILL BE REC\P$ AT A LAT] TIME ?R\< A G5]AL UPSW+ ( ECONOMIC ACTIVITY4 ,9 ORD] TO ACCEL]ATE ! G5]AL EXPANSION ( CAPITAL & TO 5L>GE ITS M>KETS1 AN ECONOMIC 9TEGRATION ( ! NATIONALLY-DISP]S$ ,EUROPEAN ECONOMIES APPE>$ 9DISP5SABLE & F\ND /RONG ,AM]ICAN SUPPORT4 ,ECONOMIC 9TEGRATION CAN MEAN DIFF]5T ?+S - ! 0AUTOMATISM0 ( A FREE WORLD M>KET1 AS WELL AS POLITICAL UNIFICATION ) PLANN$ SUPRA-NATIONAL 9T]V5TIONS 9 ! ECONOMY4 ,! LATT] TYPE ( 09TEGRATION0 WAS 9CORPORAT$ 9 ! ,NAZI VISION ( A ,EUROPE UND] ,G]MAN CONTROL4 ,DUR+ ! W>1 ,5GLI% VOICES W]E RAIS$ = A ,UNIT$ ,EUROPE UND] ,BRITI% TUTELAGE4 ,BUT ! W> R$UC$ ,GREAT ,BRITA9 TO A SECOND>Y P[]1 DESPITE H] F>-FLUNG BUT DECAY+ ,COMMONWEAL? CONNECTIONS4 ,! FUTURE & *>ACT] ( CONT95TAL ,EUROPE SEEM$ N[ TO BE DET]M9$ BY ! EVOLV+ P[] /RUGGLE BETWE5 ,RUSSIA & ! ,UNIT$ ,/ATES4 ,= ! LATT] TO W91 OR EV5 TO HOLD H] [N1 A RAPID ,EUROPEAN RECOV]Y WAS NECESS>Y4 ,?IS 9DUC$ ! ,M>%ALL ,PLAN & =C$ ! ,UNIT$ ,/ATES TO ACCEPT ECONOMIC POLICIES DISCRIM9ATORY TO H] [N /RICTLY ECONOMIC 9T]E/S4 ,AL?\< ! CONCEPTION ( 09TEGRATION0 ( ! ,EUROPEAN ECONOMIES WAS AT ONCE ECONOMIC & POLITICAL1 AT ITS />T IT WAS A PURELY MONET>Y MATT] 9 ACCORDANCE ) ! ,KEYNESIAN VIEW ( ?+S :I* CONSID]S ALL ECONOMIC ACTIVITIES MA9LY FROM ! MONET>Y ANGLE4 ,SEV]AL HUNDR$ *ANGES 9 EX*ANGE-RATES 9 CONCURR5CE ) DIFF]5T DEGREES ( 9FLATION 9 V>I\S C\NTRIES HAD L$ 9TO AN IMP5ETRABLE JUNGLE ( 9CONV]TIBILITY4 ,TO RE/ORE AT LEA/ P>TIAL CONV]TIBILITY WAS !N REG>D$ AS ! />T+ PO9T = AN 9CREASE ( TRADE & A CONSEQU5T RISE 9 PRODUCTION4 ,! FIR/ ATTEMPT 9 ?IS DIRECTION WAS ! ,EUROPEAN ,PAYM5TS ,UNION1 MODEL$ AFT] ! ,9T]NATIONAL ,CLE>+ ,UNION PROPOS$ BY ,KEYNES DUR+ ,WORLD ,W> ,I,I4 ,IT WAS TO MAKE POSSIBLE A BETT] TRANSF] ( ,EUROPEAN CURR5CIES1 :I* WAS REG>D$ AS A PRECONDITION = ! ELIM9ATION ( IMPORT RE/RICTIONS1 EXPORT SUBSIDIES1 & O!R MEASURES ?AT HAMP]$ 9TRA-,EUROPEAN TRADE4 ,IT WAS ALSO REG>D$ AS A WAY-/ATION ON ! ROAD TO UNIV]SAL CONV]TIBILITY 9 AN ALTOGE!R FREE-TRAD+ WORLD4 ,EUROPEAN TRADE & PAYM5TS PROBLEMS W]E SOON SUP]S$$1 H[EV]1 BY ! OV]RID+ ISSUES ( ,WE/]N DEF5SE & ,G]MANY'S 9CORPORATION 9TO ! ,ATLANTIC ,PACT4 ,9 ! YE>S S9CE ,POTSDAM IT HAD BECOME CLE> ?AT ! EXT5SIVE DE/RUCTION & HOLD+-D[N ( ,G]MAN 9DU/RY' PLAY$ 9TO ! H&S ( ! NEW ,RUSSIAN ADV]S>Y4 ,9 ! SPR+ ( #aiea ! ,WE/]N ALLIES REVIS$ ! ,OCCUPATION ,/ATUTE 9 EX*ANGE = GU>ANTEES ?AT ,G]MANY W\LD HONOR H] PRE-W> & PO/W> DEBTS & = ! ASSURANCE ?AT %E W\LD COOP]ATE TO ! LIMITS ( H] CAPACITY 9 ! ,WE/]N DEF5SE EF=T4 ,! DECISION TO REVIVE ,G]MANY'S ECONOMIC P[] IMPLI$ DIFF]5T ?+S = ,FRANCE & ,5GL& ?AN = ! ,UNIT$ ,/ATES4 ,= ! LATT]1 IT WAS FIR/ ( ALL A MILIT>Y DECISION1 A PREP>ATION = A POSSIBLE NEW M>* ON ,MOSC[ ) ! 0EXP]I5C$0 ,G]MAN >MY AS ! SPE>HEAD ( A ,EUROPEAN =CE COV]$ BY ! IMM5SE PRODUCTIVE P[] ( ,AM]ICA4 ,! REVIVAL ( ,G]MANY1 BO? 9DU/RIAL & MILIT>Y1 WAS ACCEPTABLE TO ,FRANCE ONLY IF IT WAS ACCOMPANI$ BY GU>ANTEES ?AT ASSUR$ ,FRANCE A DOM9AT+ POSITION 9 ,EUROPE4 ,YET ,FRANCE'S ACTUAL WEAKNESS & 9ABILITY TO OPPOSE ,AM]ICAN POLICIES 9DUC$ ,FR5* POLITICIANS TO ANTICIPATE ! DANG]\S ASPECTS ( ?IS DEVELOPM5T & TO ANSW] !M 9 ADVANCE ) ! ,S*UMAN ,PLAN4 ,! PURPOSE ( ! ,S*UMAN ,PLAN1 ! CONCEPTION ( A ,EUROPEAN ,COAL & ,/EEL ,COMMUNITY1 WAS TO CREATE A S+LE M>KET = COAL & /EEL 9 ALL ( ,WE/]N ,EUROPE4 ,ADH]5CE ( ,FRANCE & ,G]MANY MADE P>TICIPATION BY ! SMALL] NATIONS PRACTICALLY M&ATORY4 ,BRITA9 ASSOCIAT$ H]SELF M]ELY = ! EX*ANGE ( 9=MATION1 )\T SURR5D]+ CONTROL OV] H] [N COAL & /EEL AFFAIRS4 ,! NEW SUPRA-NATIONAL 9/ITUTION WAS HAIL$ AS ! BEG9N+ ( A NEW ]A 9 9TRA-,EUROPEAN RELATIONS1 AS ! H>B+] ( BETT] ?+S TO COME4 ,! DRAW+ 9TO ! S+LE M>KET ( O!R PRODUCTS BESIDES COAL & /EEL1 & ! CREAT+ ( AN ,EUROPEAN ATOMIC 5]GY PROGRAM1 W]E TO CULM9ATE 9 A ,WE/]N ,EUROPEAN ,F$]ATION1 A ,UNIT$ ,/ATES ( ,EUROPE4 ,9 A MORE PROSAIC MOOD1 H[EV]1 ! ,COAL & ,/EEL ,COMMUNITY APPE>$ TO BE M]ELY AN EXT5SION ( ! ,EUROPEAN /EEL C>TEL ( PRE-,HITL] DAYS4 ,COAL & /EEL 9 ,FRANCE & ,G]MANY LIE CLOSE TO ! BORD]S ( !SE NATIONS 9 ! ,SA>1 9 ,LORRA9E & ! ,RUHR4 ,TO COMB9E ! IRON ORE ( ,LORRA9E ) ! COAL ( ! ,RUHR HAS BE5 ! CONC]N ( BO? C\NTRIES = A HUNDR$ YE>S4 ,! ,EUROPEAN /EEL C>TEL1 :I* LA/$ UNTIL ! ,SECOND ,WORLD ,W>1 WAS A PRICE-FIX+ >RANGEM5T :OSE EXI/5CE 9DICAT$ ! RELATIVE CAPITAL /AGNATION AT ?AT TIME4 ,& 9 #a#i#e1 :5 ! ,S*UMAN ,PLAN WAS BORN1 !RE W]E SIGNS ( IMP5D+ SURPLUSES ( COAL & /EEL2 SO ?AT ! ,PLAN WAS PROBABLY 9SPIR$ 9 P>T BY ! DESIRE TO AVOID ANO!R P]IOD ( CUT?ROAT COMPETITION4 ,YET1 AT ! TIME ( ITS RATIFICATION & DUR+ ! P]IOD IMM$IATELY PREC$+ IT1 ! SITUATION HAD ALREADY *ANG$ 9 FAVOR ( A G5]AL EXPANSION ( COAL & /EEL PRODUCTION4 ,!RE WAS N[ A NE$ = ,G]MAN & ,FR5* COLLABORATION NOT SO MU* TO SECURE ! GIV5 M>KET AS TO ASSURE A L>G] PRODUCTION4 ,:ATEV] ! FUTURE W\LD BR+1 ! ,COAL & ,/EEL ,COMMUNITY SATISFI$ ALL ?OSE 5GAG$ 9 ITS F\NDATION4 ,= ,AM]ICA IT 9CREAS$ ! W>-POT5TIAL ( ! ,WE/2 = ,G]MANY IT (F]$ A *ANCE = A QUICK] RECOV]Y2 & = ,FRANCE IT PROVID$ ! OPPORTUNITY TO P>TAKE 9 ! CONTROL ( ! 9EVITABLE DEVELOPM5T ( ,G]MANY'S PRODUCTIVE P[] & W>-MAK+ ABILITY4 ,9 ONE S5SE ! RATIFICATION ( ! ,S*UMAN ,PLAN WAS ALSO A RESULT ( ! ,G]MAN RECOV]Y1 :I* CAME TO BE WIDELY REG>D$ AS A 0MIRACLE0 & A MANIFE/ATION ( CAPITALISM'S UNDIM9I%$ P[] ( EXPANSION4 ,?IS 0MIRACLE0 WAS1 ( C\RSE1 ! RESULT ( ! COLOSSAL DE/RUCTION ( CAPITAL1 :I* BO? ALL[$ = & NECESSITAT$ AN 5ORM\S AM\NT ( RECON/RUCTION4 ,RECOV]Y WAS AID$ BY A RADICAL CURR5CY RE=M1 BY ,AM]ICAN AID & 9VE/M5TS1 & BY POLITICAL CONDITIONS UND] :I* M]E SURVIVAL WAS 9C5TIVE 5\< = ! WORK]S TO 5DURE ! GREATE/ DEGREE ( EXPLOITATION4 ,WORK+-H\RS W]E LONG] 9 ,G]MANY ?AN ANY :]E 9 ,EUROPE4 ,:ILE ,G]MAN WAGES W]E HALF ( ,BRITI% WAGES1 9VE/M5TS 9 ,G]MANY W]E #be P] C5T ( ! NATIONAL 9COME AS AGA9/ ,BRITA9'S #af P] C5T4 ,P] CAPITA CONSUMPTION ( ! ,WE/ ,G]MAN POPULATION WAS ONLY #f P] C5T ( ?AT ( ,BRITA92 9 NO C\NTRY 9 ,WE/]N ,EUROPE WAS A SMALL] P]C5TAGE ( ! GROSS NATIONAL PRODUCT EMPLOY$ = P]SONAL NE$S ?AN 9 ,G]MANY4 ,?IS EXCEPTIONAL RATE ( EXPLOITATION T5D$1 ( C\RSE1 T[>DS ! ,EUROPEAN AV]AGE2 BUT :ILE 9 EFFECT1 IT DID RE/ORE ,G]MANY'S ECONOMIC POSITION )9 ! ,EUROPEAN ECONOMY4 ,:AT IS1 P]HAPS1 ( SPECIAL 9T]E/ 9 ?IS CONNECTION IS ! CLOSE ASSOCIATION BETWE5 ! ,G]MAN REVIVAL1 ! ,EUROPEAN RECOV]Y1 & 9NOVATIONS SU* AS ! ,PAYM5TS ,UNION & ! ,S*UMAN ,PLAN ) ! ,WE/]N DEF5SE PROGRAM UND] ,AM]ICAN LEAD]%IP4 ,9 FACT1 ! ,COAL & ,/EEL ,COMMUNITY & ! ,EUROPEAN ,DEF5SE ,COMMUNITY W]E AT FIR/ SUPPOS$ TO %>E ! SAME ,C\RT & ! SAME ,ASSEMBLY *>G$ ) ! CREATION ( A ,EUROPEAN ,>MY1 A SUPRA-NATIONAL =CE ) A SUPREME COMM&] UND] ! T]MS ( ! ,NOR? ,ATLANTIC ,TREATY4 ,H[EV]1 ?IS CONCEPT ( ! ,DEF5SE ,COMMUNITY C\LD NOT BE REALIZ$1 & ! DIFFICULTIES ?AT >OSE ) RESPECT TO ! ,DEF5SE ,COMMUNITY F\ND !IR REFLECTION 9 *ANG$ ATTITUDES T[>D ! ,COAL & ,/EEL ,COMMUNITY4 ,AL?\< ! LATT] BECAME EFFECTIVE 9 ! SUMM] ( #a#i#e#b1 NO REAL PROGRESS T[>DS A ,COMMON ,M>KET WAS MADE4 ,TO BE SURE1 ! S+LE M>KET WAS TO BE REALIZ$ ONLY 9 /AGES1 ) REG>D TO BO? ! V>Y+ CONDITIONS 9 ! MEMB] NATIONS & ! V>IETY ( PRODUCTS BR\KET = FIVE YE>S & SOME COAL & COKE SUBSIDIES W]E CONT9U$4 ,! RECESSION ( #ai$ IMP$$ ! DEVELOPM5T /ILL FUR!R & ! ,HI< ,AU?ORITY SOON HAD TO ADMIT ?AT IT WAS ABLE NEI!R TO DEVELOP REAL COMPETITION 9 ! /EEL 9DU/RY NOR TO REGULATE ! PRICES 9 ACCORDANCE ) ! T]MS ( ! ,COMMUNITY'S CON/ITUTION4 ,! ,M>KET WAS A COMMON M>KET ONLY 9 A =MAL S5SE4 0,IF ! ,COMMUNITY W]E ABOLI%$ TOMORR[10 IT WAS SAID1 0NO?+ W\LD BE *ANG$ & NOBODY W\LD FEEL ?AT A LIV+ ?+ HAD BE5 KILL$4.<#a.> ,H[EV]1 ! ,COMMUNITY'S ACTIVITIES W]E SPE$$ UP SOON AFT] ! ,KOREAN W>4 ,ITS CONTROL WAS EXT5D$ TO ALL TYPES ( 5]GY4 ,A S]IES ( T>IFF R$UCTIONS 9 #aiei W]E C\PL$ ) ! PROCLAIM$ 9T5TION ( REA*+ A S+LE1 SIX-NATION1 T>IFF-LESS M>KET BY #aife OR #a#i#g4 ,AL?\< ! FIR/ T>IFF R$UCTIONS W]E NOT ( GREAT SIGNIFICANCE1 !Y DID HELP 9ITIATE A RA% ( ECONOMIC *ANGES ( GREAT] IMPORTANCE4 ,A S]IES ( 9DU/RIAL AGREEM5TS )9 ! ,COMMUNITY L$ TO MANY CAPITAL M]G]S )9 & BETWE5 ! MEMB] NATIONS4 ,!SE 5COMPASS$ JO9T SELL+ & PRODUCTION1 ! POOL+ ( RES\RCES1 SPECIALIZATION & RATIONALIZATION4 ,AS 9 PREVI\S P]IODS ( PROSP]ITY1 ! 5SU+ ECONOMIC UPSW+ CREAT$ A CLIMATE ( OPTIMI/IC READ9ESS TO =EGO SOME ( ! /IFL+ MEASURES ( PROTECTIONISM4 ,BUT AS ! REMOVAL ( TRADE B>RI]S IS B\ND TO 9CREASE BO? COMPETITION & PROTECTION AGA9/ COMPETITION1 IT FO/]S CAPITAL CONC5TRATION4 ,LESS PRODUCTIVE 5T]PRISES MADE ROOM = MORE PRODUCTIVE ONES1 ?US /R5G!N+ ! COMPETITIVE ABILITY ( ! ,EUROPEAN ,COMMUNITY'S 9DU/RIES4 ,:ILE ?IS SPELL$ 0PROGRESS0 = ! SIX-NATION ECONOMIES1 IT ALSO PO9T$ TO %>P] 9T]NATIONAL COMPETITION4 ,BUT COMPETITION 9 A G5]ALLY UNFOLD+ ECONOMY M]ELY ACCEL]ATES ! UPW>D SW+4 ,EUROPEAN PRODUCTION EXP&$ & EXPORTS 9CREAS$1 CUTT+ ! ,UNIT$ ,/ATES TRADE SURPLUS TO ITS N>R[E/ M>G9 S9CE ! 5D ( ! ,SECOND ,WORLD ,W>4 ,BY #aiei ! ,COMMON ,M>KET NATIONS W]E PROSP]+1 ) VIRTUALLY FULL EMPLOYM5T4 ,) ! ,COMMON ,M>KET A REALITY1 ,5GL& JO9$ SIX O!R NATIONS.<#a#a.> 9 A ,EUROPEAN ,FREE ,TRADE ,ASSOCIATION TO C\NT]ACT ! POSSIBLE COMPETITIVE ADVANTAGES ( ! SIX-NATION TRAD+ BLOC4 ,RETA9+ FULL CONTROL OV] !IR NATIONAL ECONOMIC POLICIES1 9CLUD+ T>IFFS ) C\NTRIES \TSIDE ! ,FREE ,TRADE ,ASSOCIATION1 !SE SEV5 NATIONS PL$G$ !MSELVES TO L[ T>IFFS )9 ! ,ASSOCIATION1 TO FAIR COMPETITION1 TO ! EQUALIZATION ( SUPPLY CONDITIONS1 & TO A FULL EMPLOYM5T POLICY4 ,! TRAD+ BLOCS CREAT$ AS MANY PROBLEMS AS !Y SOLV$4 ,:ILE !Y 9CREAS$ TRADE ACROSS NATIONAL B\ND>IES1 !Y T5D$ TO OB/RUCT WORLD-WIDE TRADE4 ,& ! NEW FREE-TRADE >EAS DISRUPT$ ! TRADE PATT]NS :I* HAD GR[N UP FROM E>LI] PATT]NS ( PRODUCTION4 ,:ILE CAPITAL FL[$ MORE EASILY )9 ! SEP>ATE TRAD+ BLOCS1 IT FL[$ LESS EASILY FROM ONE BLOC TO ANO!R4 ,! REALIZATION ( ! TWO TRAD+ BLOCS PROBABLY APPE>$ AS ! FIR/ & ONLY POSSIBLE /EP T[>D UNIFY+ ! WORLD M>KET2 BUT IT HAS ALSO COME TO DEMON/RATE ! HOPELESSNESS ( ?IS TASK4 ,AL?\< !SE NEW 9/ITUTIONS W]E REG>D$ AS PRELIM9>Y /EPS 9 ! DIRECTION ( WORLD-WIDE M>KET 9TEGRATION1 !Y >E !MSELVES CON/ANTLY 5DANG]$ BY ! P>TICUL>I/IC & *ANG+ NE$S OR OPPORTUNITIES ( ! P>TICIPAT+ NATIONS1 AS IS ILLU/RAT$ BY RECURR5T CRISES )9 ! ,COMMON ,M>KET4 ,CELEBRAT$ BY SOME AS SO MANY SIGNS ?AT N>R[ UNECONOMICAL NATIONALISM IS 9 ! PROCESS ( BE+ OV]COME1 !SE 9/ITUTIONS >E ADJUDG$ BY O!RS AS FUTILE BECAUSE !IR SECTIONAL *>ACT] T5DS TO BLOCK RA!R ?AN FUR!R WORD-WIDE 9TEGRATION4 ,:ATEV] ! EXPECTATIONS OR APPREH5SIONS ASSOCIAT$ ) ! RISE ( ! SEP>ATE ,EUROPEAN M>KET SY/EMS1 ONE ?+ IS CLE>3 !IR EXI/5CE PO9TS \T ?AT IT IS BECOM+ 9CREAS+LY IMPOSSIBLE TO MA9TA9 PURELY NATIONAL ECONOMIC POLICIES1 & ?AT ! 0FREE0 WORLD M>KET IS NOT LIKELY TO RETURN4 ,?IS FACT WILL NOT PREV5T FUTILE ATTEMPTS 9 EI!R DIRECTION4 ,NATIONS ALWAYS T5D TO 9SULATE !IR ECONOMIES AGA9/ ! DETRIM5TAL EFFECTS ( 9T]NATIONAL CAPITAL1 :5 ?IS IS NECESS>Y4 ,YET !Y CANNOT CEASE HOP+ =1 & WORK+ T[>D1 ! RE/ORATION ( AN 0AUTOMATICALLY0 OR O!RWISE-9T]NATIONALLY-9TEGRAT$ ECONOMY4 ,REGIONAL GR\P+S CON/ITUTE A K9D-( 0COMPROMISE0 BETWE5 !SE EXTREMES1 SO AS TO OV]COME ! LIMITATIONS ( NATIONAL ECONOMY 9 A WORLD NOT SUSCEPTIBLE TO DIS9T]E/$ 9T]NATIONAL CONTROLS4 ,! ,EUROPEAN TRADE BLOCS 9ITIAT$ A G5]AL 7?\< L>GELY ILLUSORY7 MOVEM5T FROM ,AFRICA TO ,LAT9 ,AM]ICA = CU/OMS UNIONS & 9TRA-NATIONAL M>KET >RANGEM5TS4 ,BUT :ILE ! REGIONAL 0SOLUTION0 SEEMS ! ONLY ONE AVAILABLE1 IT IS A 0SOLUTION0 ONLY ON ! ASSUMPTION ?AT IT WILL MOVE T[>D1 & NOT AWAY FROM1 WORLD WIDE 9TEGRATION4 ,! 0F9AL0 SOLUTION TO ! WORLD'S TRADE & PAYM5TS PROBLEM IS1 !N1 CONCEIV$ ( AS A M]G] ( ALL ! V>I\S TRADE >EAS & ! 0ECONOMIC FUSION ( ! FREE WORLD'S NATIONS40.<#a#b.> ,IT IS RECOGNIZ$1 ( C\RSE1 ?AT SU* A 0FUSION10 9VOLV+ ! ELIM9ATION ( T>IFFS & O!R TRADE RE/RICTIONS1 W\LD AGGRAVATE ! PROBLEM ( NATIONS COMPET+ ) ! ,UNIT$ ,/ATES4 ,BUT ?IS IS TO BE DEALT ) BY A 0RELATIVELY UNIMP$$ MOVEM5T ( CAPITAL & LABOR10 BY AGREEM5T ON ! P>T ( ! 0/RONG0 NATIONS TO 0EXT5D GREAT BLOCS ( CR$IT1 WEAK] NATIONS TO TIDE !M OV] !IR BALANCE-(-PAYM5TS DIFFICULTIES10 & BY ! CREATION ( 0AN 9T]NATIONAL FUND TO EASE ! PA9 ( UNEMPLOYM5T & ( CAPITAL LIQUIDATION 9 SEGM5TS ( ANY ECONOMY H>D-HIT BY ! PROCESS ( 9TEGRATION40.<#a#c.> ,H[EV]1 ! 0RELATIVELY UNIMP$$0 MOVEM5T ( CAPITAL WORKS 9 TWO DIRECTIONS4 ,A GREAT FL[ ( CAPITAL FROM A 0/RONG]0 TO A 0WEAK]0 NATION WILL1 NO D\BT1 IMPROVE ! BALANCE-(-PAYM5TS POSITION ( ! LATT]4 ,! REC5T SPUR 9 ,AM]ICAN CAPITAL EXPORTS1 OR 9/ANCE1 IS DECREAS+ ! BALANCE-(-PAYM5TS DIFFICULTIES ( CAPITAL-IMPORT+ NATIONS = ! TIME BE+2 BUT AT A LAT] TIME MAY HAVE ! OPPOSITE EFFECT4 ,= ! \TFL[ ( PR(ITS & 9T]E/S TO ! CAPITAL-EXPORT+ C\NTRY MAY WELL EXCE$ ! AM\NT ( NEW 9VE/M5TS H] CAPITAL CREATES4 ,PR(ITS MADE 9 =EIGN C\NTRIES MU/ F9D !IR WAY BACK TO ! ,AM]ICAN BASE4 ,IF NOT ! EXPORT$ CAPITAL CEASES TO BE ,AM]ICAN CAPITAL & FUNCTIONS AS =EIGN CAPITAL 9 COMPETITION ) ,AM]ICA & ! RE/ ( ! WORLD ,:ILE IT MAY BE IMMAT]IAL TO A NATION S ECONOMY :E!R ITS CAPITAL 9VE/M5T IS ( DOME/IC OR =EIGN ORIG9 7PROVID$ ! RATE ( CAPITAL =MATION IS NOT AFFECT$ BY ! TRANSF] ( PR(ITS TO ! =EIGN 9VE/ORS7 IT IS NOT IMMAT]IAL TO ! DOME/IC CAPITALI/S ?AT !IR [N TRADITIONAL SPH]E ( CAPITAL EXPANSION IS 9VAD$ BY =EIGN CAPITAL ,!Y C\LD DO LIKEWISE ( C\RSE BY S5D+ !IR 9VE/M5T CAPITAL TO =EIGN L&S SO ?AT !RE W\LD BE NUM]\S ,EUROPEAN [N]S ( ,AM]ICAN 9DU/RIES & NUM]\S ,AM]ICAN [N]S ( ,EUROPEAN 9DU/RIES AS WELL AS BO? ,EUROPEAN & ,AM]ICAN [N]S ( 9DU/RIES 9 O!R C\NTRIES PR(ITS W\LD FL[ 7AS !Y DO7 FROM ,EUROPE TO ,AM]ICA & VICE V]SA1 CAPITALI/ 5T]PRISES W\LD HAVE *ANG$ PLACES ( OP]ATION BUT NO?+ ELSE W\LD *ANGE UNLESS ?IS V]Y PROCESS PROV$ TO BE MORE ADVANTAGE\S = ONE ?AN = ANO!R CAPITALI/ GR\P OR NATION4 ,CAPITAL MOVEM5TS TAKE PLACE DUE TO CONSID]ATIONS ( PR(ITABILITY & SECURITY ! MO/ PR(ITABLE ECONOMIES ATTRACT MO/ ( ! CAPITAL & ?US BECOME /ILL MORE PR(ITABLE ?IS DIM9I%ES ! COMPETITIVE ABILITY ( LESS PRODUCTIVE NATIONS1 MAK+ !M /ILL LESS PR(ITABLE >EAS4 ,! G5]AL FL[ ( CAPITAL IS DECREAS$ AS CAPITAL IS CONC5TRAT$ 9 NATIONS :I* >E ALREADY HILY TRANSC5DS ! POSSIBILITIES ( ! PRIVATE 5T]PRISE ECONOMY & EV5 M9IMUM REQUIREM5TS 9 ?IS DIRECTION - 5\< TO ASSURE A NECESS>Y DEGREE ( SOCIAL /ABILITY & 9T]NATIONAL 9T]C\RSE - DEP5D UPON GOV]NM5T 9T]V5TIONS :I* 0SOCIALIZE0 ! LOSSES !REBY 5G5D]$4 ,AL?\< SOCIO-ECONOMIC PROBLEMS APPE> AS M>KET & MONEY PROBLEMS1 !Y F9D !IR REAL S\RCE 9 ! GR[+ 9COMPATIBILITY ( ! PREVAIL+ PROP]TY RELATIONS & ! NATIONAL =M ( CAPITALISM ) ! *ANG+ =CES ( PRODUCTION & ! PRESS+ NE$ TO 9TEGRATE WORLD PRODUCTION & DI/RIBUTION ON PR9CIPLES O!R ?AN ?AT ( PR(ITABILITY4 ,:AT ! WORLD EXP]I5CES IS NOT SO MU* A CRISIS ( ITS MONET>Y & TRAD+ SY/EM AS A CRISIS ( CAPITAL4 ,= ! ADH]5TS ( ! SY/EM1 ( C\RSE1 IT IS NOT ! SY/EM ITSELF BUT ITS TEMPOR>Y IMBALANCES :I* HAVE TO BE ATT5D$ TO2 EI!R BY AVOID+ ALL 9T]F]5CES 9 ! M>KET ME*ANISM1 AS 9 LAISSEZ-FAIRE !ORY1 OR BY GOV]NM5TAL 9T]V5TIONS 9 ! ME*ANISM1 AS 9 ,KEYNESIAN DOCTR9E4 ,BUT :ATEV] ! !ORY & PRACTICE1 TRADE & PAYM5TS PROBLEMS CONT9UE TO AGITATE ! CAPITALI/ WORLD & WILL DO SO AS LONG AS PRODUCTION REMA9S ! PRODUCTION ( CAPITAL4 ,= MANY YE>S AFT] ! ,SECOND ,WORLD ,W>1 AS RELAT$ ABOVE1 ! ,EUROPEAN NATIONS HAD NO?+ TO SELL1 BUT A LOT TO BUY1 & NO MONEY TO BUT IT )4 ,MO/ ( !IR =EIGN 9VE/M5TS1 AS WELL AS !IR GOLD & DOLL> HOLD+S1 HAD BE5 SACRIFIC$ TO ! W>4 ,DUE TO A P]SI/5T FAVORABLE BALANCE ( TRADE1 GOLD FL[ TO ! ,UNIT$ ,/ATES UNTIL1 9 #a#i#d#i1 %E HAD AN EXCESSIVE #g P] C5T ( ! WORLD'S MONET>Y GOLD4 ,AT ?IS PO9T1 H[EV]1 ! SITUATION BEGAN TO *ANGE4 ,AM]ICA'S AID PROGRAM1 =EIGN MILIT>Y COMMITM5TS1 & CAPITAL EXPORTS CREAT$ ?IS *ANGE4 ,BY #a#i#f#e1 ,AM]ICA'S GOLD RES]VE HAD BE5 R$UC$ TO AB\T @s#a#e BILLION4 ,=EIGN C5TRAL BANKS AS WELL AS 9DIVIDUALS HOLD DOLL>S 9 !IR [N C\NTRIES & ALSO 9 ! ,UNIT$ ,/ATES 9 =M ( DEPOSIT ACC\NTS & SECURITIES :I* CAN BE TURN$ 9TO DOLL>S4 ,!RE >E F> MORE DOLL>S 9 ! H&S ( =EIGN]S ?AN >E COV]$ BY ! GOLD 9 ! ,UNIT$ ,/ATES4 ,! [N]S ( !SE DOLL>S CAN AT ANY TIME CONV]T DOLL>S 9TO GOLD1 = ! ,UNIT$ ,/ATES IS COMMITT$ SELL GOLD TO =EIGN C5TRAL BANKS AT @s#c#e AN \NCE4 ,NORMALLY1 ! GOLD RES]VE NE$ NOT BE L>GE 5\< TO COV] ALL DOLL> HOLD+S ( =EIGN BANKS1 M]*ANTS1 & 9VE/ORS1 = NORMALLY1 ! CONV]SION ( DOLL>S 9TO GOLD DOES NOT MAKE MU* S5SE4 ,GOLD1 AS SU*1 YIELDS NO PR(IT1 :]EAS ! 9VE/$ DOLL> DOES2 & IF A 0RUN ON GOLD0 DEVELOPS IT IS BECAUSE CONFID5CE 9 ! CONV]TABILITY ( ! DOLL> HAS BE5 LO/4 ,! ,UNIT$ ,/ATES LEFT ! GOLD /&>D 9 #a#i#c#c4 ,! ,GOLD ,RES]VE ,ACT ( #aicd GAVE ! ,U4 ,S4 ,TREASURY TITLE TO ALL ! GOLD 9 ! ,F$]AL ,RES]VE BANKS4 ,ALL CIRCULAT+ GOLD CO9S W]E RECALL$ & !IR POSSESSION BY 9DIVIDUALS WAS DECL>$ ILLEGAL4 ,! DOLL> WAS DEVALUAT$ BY RAIS+ ! PRICE ( GOLD FROM @s#b#a AN \NCE TO @s#c#e AN \NCE1 A PRICE :I* /ILL PREVAILS AT ?IS WRIT+4 ,BY #aicg ! ,UNIT$ ,/ATES1 ! ,UNIT$ ,K+DOM & ,FRANCE AGRE$ UPON A GOLD EX*ANGE /&>D UND] :I* !Y SETTL$ 9T]NATIONAL F9ANCIAL BUS9ESS ON A GOLD BASIS1 :ILE CONDUCT+ DOME/IC MONEY POLICIES 9 ACCORDANCE ) !IR 9DIVIDUAL NE$S4 ,! FIX$ GOLD PRICE DET]M9ES ! VALUE ( ! DOLL> & ! VALUES ( O!R CURR5CIES >E PEGG$ TO ! VALUE ( ! DOLL>4 ,:]EAS 9 #aicd GOLD HAD BE5 OV]-EVALUAT$ RELATIVE TO ! DOLL>1 IT IS N[ UND]-EVALUAT$1 S9CE PRICES HAVE MEAN:ILE RIS5 9 DOLL> T]MS4 ,H[EV]1 !RE IS ALWAYS ! POSSIBILITY ?AT ! PRICE ( GOLD WILL BE RAIS$1 AS IT WAS 9 #a#i#c#d1 ?US DEVALUAT+ ! DOLL>4 ,! DOLL> &1 TO A LESS] EXT5T1 /]L+ S]VE & WORLD MONEY4 ,BO? >E RES]VE CURR5CIES2 SO ?AT ! /ABILITY ( ! WORLD'S MONET>Y SY/EM DEP5DS ON ! ACTIONS ! ,UNIT$ ,/ATES TAKES1 EI!R UNILAT]ALLY OR 9 CONC]T ) ,GREAT ,BRITA94 ,IF ! DIFF]5T NATIONAL MONET>Y AU?ORITIES W]E C]TA9 ?AT ! DOLL> PRICE ( GOLD W\LD 9CREASE1 !Y W\LD NOT HOLD DOLL>S2 & IF !Y W]E C]TA9 ?AT !RE W\LD NOT BE SU* AN 9CREASE1 !Y W\LD MO/ LIKELY /ICK TO !IR DOLL> & /]L+ RES]VES4 ,BUT !RE IS NO C]TA9TY2 &1 CONSEQU5TLY1 C5TRAL BANKS RU% \T ( CURR5CY & 9TO GOLD :5EV] ! /ABILITY ( ! RES]VE CURR5CIES IS 9 D\BT4 ,!IR PREF]5CE = GOLD REFLECTS !IR DESIRE TO PROTECT !IR RES]VES AGA9/ ! HAZ>DS ( DEPRECIATION4 ,= SOME TIME N[ ! ,AM]ICAN PAYM5TS DEFICIT HAS RANG$ BETWE5 @s#b BILLION & @s#d BILLION YE>LY4 ,! DEFICIT IS ! DIFF]5CE BETWE5 ! 9FL[ & \TFL[ ( MONEY 9 ALL 9T]NATIONAL TRANSACTIONS4 ,9 P>T IT IS CAUS$ BY ,AM]ICAN CAPITAL EXPORTS4 ,USUALLY1 CAPITAL MOVEM5TS >E CONSID]$ A POSITIVE FACTOR 9 ?AT !Y LEAD 9VE/M5TS :]E !Y >E MO/ PRODUCTIVE1 I4E41 MO/ PR(ITABLE4 ,FUNDS NOT EMPLOY$ 9 ! ,UNIT$ ,/ATES HAVE GONE 9 GREAT BULK TO ,EUROPE1 ACC5TUAT+ AN ALREADY-EXI/+ EXPANSION>Y TR5D4 ,?IS BR\S :I* W5T TO ,EUROPE4 ,!SE DOLL>S1 IT IS TRUE1 >E CONV]TIBLE 9TO COMMODITIES OR CURR5CIES1 AS WELL AS 9TO GOLD4 ,= ! 9DIVIDUALS & FIRMS 9VOLV$ 9 !SE TRANSACTIONS1 ALL ?IS IS1 )\T D\BT1 S\ND BUS9ESS4 ,BUT FROM A 0NATIONAL PO9T ( VIEW10 ! F9AL RESULT IS ?AT ! ,EUROPEAN NATIONS W9D UP ) L>GE DOLL> & GOLD RES]VES1 :ILE ,AM]ICAN 9VE/ORS W9D UP ) PRODUCTIVE1 ?AT IS1 PR(IT ABLE PROP]TY - ) CAPITAL4 ,! RE-CAPITALIZ+ ,EUROPEAN ECONOMIES PROV$ MORE PR(ITABLE ?AN ! RELATIVELY /AGNAT+ ,AM]ICAN ECONOMY4 ,= ! SAME REASON - PR(IT BE+ ! DET]M9+ ELEM5T - NO REAL 9C5TIVE >OSE = ,EUROPEAN CAPITAL TO (FSET ,AM]ICA'S P5ETRATION ( ! ,EUROPEAN ECONOMIES ) ,EUROPEAN CAPITAL EXPORTS TO ! ,UNIT$ ,/ATES4 ,IT IS /ILL EXPECT$1 ( C\RSE1 ?AT ONCE ! ,EUROPEAN RECON/RUCTION BOOM IS OV]1 CAPITAL MOVEM5TS WILL AGA9 *ANGE DIRECTION ?R\< ! REPUR*ASE ( ASSETS N[ [N$ BY ,AM]ICANS1 ! PUR*ASE ( ,AM]ICAN SECURITIES1 & ,EUROPEAN DIRECT 9VE/M5TS 9 ,AM]ICAN 9DU/RY4 ,& ?IS C\LD WELL HAPP52 !RE IS NO REASON :Y ! CURR5T DIFF]5CE 9 ECONOMIC ACTIVITY BETWE5 ! ,WE/ ,EUROPEAN NATIONS & ! ,AM]ICAN ECONOMY %\LD BE A P]MAN5T AFFAIR4 ,MEAN:ILE1 H[EV]1 ,EUROPEAN GOV]NM5TS >E 9CREAS+LY LESS 9CL9$ TO WELCOME CAPITAL IMPORTS FROM ! ,UNIT$ ,/ATES1 EV5 ?\< - S9CE !Y >E CAPITAL-EXPORT+ NATIONS !MSELVES - !Y CANNOT DIRECTLY OPPOSE ! 9T]NATIONAL MOVEM5T ( CAPITAL4 ,!RE IS NO LIMIT TO ! CREATION ( DOLL>S O!R ?AN ?AT :I* ! ,AM]ICAN MONEY AU?ORITIES IMPOSE ON !MSELVES4 ,! ,AM]ICAN CAPITAL EXPORT IS AN 9DIRECT EXT5SION ( ,AM]ICAN GOV]NM5T CR$IT TO ! 9T]NATIONAL SC5E1 BUT IT PLACES PR(ITS MADE 9 O!R NATIONS 9TO ! H&S ( ,AM]ICAN CAPITALI/S4 ,IT HAS L$ TO A VA/ 9T]NATIONAL ACCUMULATION ( DOLL> DEBTS4 ,=EIGN CLAIMS AGA9/ ! ,UNIT$ ,/ATES AM\NT$ TO AB\T @s#a#c BILLION BY #a#i#f#e4 ,!Y SOON ADD UP TO A SUM EXCE$+ ! GOLD RES]VE4 ,EV5 IF ! ,UNIT$ ,/ATES 9T5DS TO PAY ITS DEBTS TO O!R NATIONS 0D[N TO ! LA/ B> ( GOLD10 IT MAY NOT BE ABLE TO DO4 ,BUT UNLESS CONV]TIBLE 9TO GOLD IT IS ! DEPRECIAT+ DOLL>1 ! FIX$ GOLD :I* /&S BEH9D ! =EIGN CLAIMS ON ! ,UNIT$ ,/ATES4 ,IT IS BASICALLY ! PR(ITABILITY ( CAPITAL & ! RATE ( CAPITAL =MATION :I* DET]M9E ! /ATE ( ! 9T]NATIONAL PAYM5TS SY/EM 9S(> AS IT RELATES TO CAPITAL IMPORTS & EXPORTS4 ,MONEY :I* CANNOT BE CAPITALIZ$ 9 ! /AGNAT+ ,UNIT$ ,/ATES IS CAPITALI/ICALLY APPLI$ 9 ! EXP&+ NATIONS4 ,S9CE ! HI<] RATE ( GR[? 9 ! LATT] IS (FSET BY A L[] RATE 9 ! ,UNIT$ ,/ATES1 ! G5]AL GR[? RATE IS OBVI\SLY TOO L[ = A G5]ALLY PR(ITABLE EXPANSION ( WORLD CAPITAL4 ,S9CE ONLY A FEW NATIONS G5]ATE AN 9CREAS+ DEM& = CAPITAL1 ! AVAILABLE CAPITAL FL[S TO !SE NATIONS & HELPS 9 ! CREATION ( AN IMBALANCE 9 ! 9T]NATIONAL PAYM5TS SY/EM4 ,IT IS NOT V]Y DIFF]5T ) RESPECT TO 9T]NATIONAL TRADE4 ,IF A C\NTRY %[S A P]SI/5T PAYM5TS DEFICIT1 IT OBVI\SLY BUYS MORE FROM ABROAD ?AN IT SELLS TO O!R NATIONS4 ,ITS [N PRODUCTION CANNOT COMPETE ) ?AT ( O!R NATIONS4 ,= EXAMPLE1 ,5GL&1 ONCE ! LEAD] 9 9DU/RIAL DEVELOPM5T1 UTILIZ$ H] DOM9ANT POSITION TO BECOME ! MONOPOLI/IC 9T]M$I>Y ( WORLD TRADE & 9T]NATIONAL 9VE/M5TS4 ,H] [N 9DU/RIAL DEVELOPM5T WAS 9CREAS+LY NEGLECT$ 9 FAVOR ( H] F9ANCIAL DOM9ANCE 9 WORLD ECONOMY - A DOM9ANCE BAS$ ON ! GREAT MONEY RES]VES ACCUMULAT$ DUR+ H] 9DU/RIAL ASC5DANCY4 ,BUT ! WORLD'S F9ANCIAL /RUCTURE1 ) ,5GL& AS ITS C5T]1 WAS UNDONE DUR+ DECADES ( DEPRESSION & W>1 ?R\< ! DISSOLUTION ( ! ,EMPIRE & ! F9ANCIAL ASC5DANCY ( O!R1 MORE PRODUCTIVE1 NATIONS4 ,ONCE ! BANK] ( ! WORLD1 ,BRITA9 BECAME A DEBTOR NATION1 GO+ FROM ONE PAYM5TS CRISIS TO ANO!R & OV]COM+ EA* ONLY TEMPOR>ILY BY BORR[+S FROM ABROAD4 ,!RE IS NO MONET>Y MEANS ( ESCAPE FROM ?IS PREC>I\S POSITION1 F\ND$ 9 FACT ON 9SUFFICI5T CAPITAL =MATION4 ,! PAYM5TS DEFICIT IS H]E ACTUALLY A DEFICIT ( CAPITAL PRODUCTION4 ,A PAYM5TS DEFICIT CAN BE 5D$ ONLY BY 5D+ ! CONDITIONS ?AT GAVE RISE TO IT4 ,IF A DEFICIT >ISES BECAUSE ( L>GE CAPITAL EXPORTS1 !SE EXPORTS CAN BE HALT$ BY GOV]NM5T DECREE1 OR BY A V>IETY ( ECONOMIC P5ALTIES :I* MAKE !M LESS ATTRACTIVE4 ,EQUALLY1 IF A GOV]NM5T FE>S ?AT CAPITAL IMPORTS LEAD TO AN UNDESIRABLE /ATE ( 9FLATION & TO ! GRADUAL DISPLACEM5T ( NATIVE BY =EIGN CAPITAL1 IT CAN PROHIBIT CAPITAL IMPORTS OR SUBJECT !M TO DISC\RAG+ SANCTIONS4 ,9 BO? CASES1 ! PREVAIL+ SITUATION CAN BE *ANG$ BY GOV]NM5T 9T]V5TIONS4 ,TO ! EXT5T1 H[EV]1 ?AT A GOV]NM5T RE/RICTS ! IMPORT ( CAPITAL IT WILL ALSO LIMIT ITS C\NTRY'S ECONOMIC ACTIVITY &1 9 CONSEQU5CE1 LIMIT ! OV]ALL PRODUCTION ( ! WORLD ECONOMY4 ,9 P>T AT LEA/1 ! REC5T ,WE/ ,EUROPEAN EXPANSION WAS DUE TO ! ,AM]ICAN PAYM5TS DEFICIT 9S(> AS IT RESULT$ FROM ! EXPORT ( CAPITAL CUTT+ ! ,AM]ICAN DEFICIT BY RE/RICT+ ! EXPORT ( CAPITAL MEANS ! R$UCTION ( ECONOMIC ACTIVITY 9 CAPITAL-IMPORT+ NATIONS4 ,! POSSIBLE 5D1 OR DECISIVE R$UCTION1 ( DEFICITS DUE TO CAPITAL MOVEM5TS MAY MAKE MONEY SC>CE EV5 :]E IT IS /ILL CAPABLE F9D+ PR(ITABLE EMPLOYM5T1 & ! A*IEVEM5T O AN 9T]NATIONAL PAYM5TS BALANCE MAY CO9CIDE ) A G5]AL CONTRACTION ( ECONOMIC ACTIVITY4 ,H[EV]1 PAYM5TS DEFICITS >E ONLY P>TLY CAUS$ BY CAPITAL EXPORTS &1 AS F> AS ! ,UNIT$ ,/ATES IS CONC]N$1 NOT AT ALL BY TRADE4 ,TO SOME EXT5T ?IS HOLDS TRUE ALSO = ,5GL&1 :]E ! DEFICIT IS P>TLY A RESULT ( H] ATTEMPT TO KEEP ! ,/]L+ ,>EA & ! REMNANTS ( H] VANI%+ ,EMPIRE UND] ,BRITI% CONTROL4 ,! /EADY \TFL[ ( MONEY = !SE PURPOSES CANNOT BE COMP5SAT$ = BY AN 9FL[ ( MONEY SU* AS RESULTS SOON] OR LAT] FROM ! EXPORT ( CAPITAL4 ,BRITA9 & ,AM]ICA CANNOT ELIM9ATE !SE 0EXTRA-ECONOMIC0 EXP5SES )\T *ANG+ !IR =EIGN POLICIES & R5\NC+ !IR IMP]IALI/IC AMBITIONS & P[] POSITIONS4 ,%ORT ( FUNDAM5TAL SOCIAL *ANGES1 !SE *ANGES >E NOT TO BE EXPECT$4 ,GOLD IS /ILL ! ONLY FULLY ACCEPTABLE MEANS ( 9T]NATIONAL PAYM5TS4 ,! RES]VE CURR5CIES1 /]L+ & ! DOLL>1 >E ACCEPTABLE ONLY BECAUSE ( !IR ASSUR$ CONV]TIBILITY 9TO GOLD4 ,IF CONFID5CE 9 ?IS CONV]TIBILITY %\LD BE LO/1 !SE CURR5CIES C\LD NOT FUNCTION AS 9T]NATIONAL MEANS ( PAYM5T4 ,& ?IS CONFID5CE WEAK5S ) ! P]SI/5CE ( ! PAYM5TS DEFICITS ( ! TWO NATIONS :OSE MONET>Y UNITS SUB/ITUTE = GOLD4 ,:5 BO? ! PUR*AS+ P[] ( !IR CURR5CIES AN !IR GOLD RES]VES DECL9E1 CONFID5CE 9 ! GOLD EX*ANGE ME*ANISM IS B\ND TO DIM9I%4 ,IT SEEMS1 !N1 ?AT RESOLV+ ! PAYM5TS PROBLEMS ( ! DEFICIT NATIONS C\LD PROVE JU/ AS DISA/R\S AS ALL[+ !M TO CONT9UE4 ,= ! =M] C\RSE ?REAT5S TO DE/ROY 9T] NATIONAL 0LIQUIDITY10 I4E41 ! AVAILABILITY ( MONEY = AN EXP&+ CAPITAL & COMMODITY M>KET4 ,TO ESCAPE ?IS DILEMMA1 ALL ( MONET>Y RE=MS HAVE BE5 PROPOS$4 ,! MORE DRAMATIC ( !SE PROPOSALS SUGGE/$ A RETURN TO ! OLD GOLD /&>D1 ! COMPLETE DE-MONETIZATION ( GOLD1 & ! DE-NATIONALIZATION ( MONET>Y RES]VES ?R\< !IR ADM9I/RATION BY 9T]NATIONAL 9/ITUTIONS SU* AS ! ,9T]NATIONAL ,MONET>Y ,FUND4 ,! LEA/ REALI/IC ( !SE PROPOSALS1 SUGGE/$ BY ,JACQUES ,RUEFF1 IS ! RETURN TO ! OLD GOLD /&>D4 ,?IS WAS1 P]HAPS1 ADVOCAT$ MORE AS A RATIONALIZATION ( ,FRANCE'S REC5T POLICY ( *ANG+ H] DOLL> HOLD+S 9TO GOLD ?AN AS A S]I\S BELIEF 9 ! WORKABILITY ( A RESURRECT$ GOLD /&>D4 ,:Y ! GOLD /&>D %\LD N[ OP]ATE BETT] ?AN 9 ! PA/ WAS NOT MADE CLE>1 SAVE = ! HOPEFUL ASS]TION ?AT IT W\LD 5D ! AGE ( 9FLATION TO :I* ALL C\NTRIES >E N[ SUBJECT$4 ,9 ALL NATIONS1 H[EV]1 9FLATION HAS BECOME ! MAJOR POLICY = COP+ ) ! PROBLEMS ( CAPITALI/ PRODUCTION UND] CONDITIONS ( A DECL9+ RATE ( PRIVATE CAPITAL =MATION4 ,! SUGGE/$ RESURRECTION ( ! GOLD /&>D PROMPT$ A C\NT]-PROPOSAL3 ! DE-MONETIZATION ( GOLD WAS TO SOLVE ! DIFFICULTIES 5C\NT]$ ) ! GOLD EX*ANGE ME*ANISM4 ,IF ,AM]ICA UNILAT]ALLY REFUS$ TO BUY & HOLD GOLD = MONET>Y PURPOSES1 IT WAS ASS]T$1 ! WORLD C\LD BE =C$ 9TO ACCEPT A DOLL> /&>D )\T A GOLD BASE4 ,ONCE ?IS HAPP5$1 GOLD W\LD BECOME A M]E COMMODITY1 SUBJECT TO ! LAW ( SUPPLY & DEM&4 ,S9CE ! PRIVATE DEM& = GOLD IS LIMIT$1 ! RELEAS$ MONET>Y GOLD W\LD FLOOD ! M>KET1 :I* W\LD DRIVE ITS PRICE BEL[ ITS PRODUCTION CO/S4.<"9.> ,! R$UCTION 9 ! PRICE ( GOLD1 IT WAS >GU$1 W\LD MAKE ! DOLL> ! MORE DESIRABLE ITEM2 & ! DOLL> W\LD BECOME ! ULTIMATE 9T]NATIONAL M$IUM ( EX*ANGE4 ,?IS AUDACI\S PLAN OV]LOOK$ ONE IMPORTANT FACT3 ! REAL CONDITIONS ( ,AM]ICAN CAPITALISM MAKE IT IMPOSSIBLE = ?AT C\NTRY TO COME CLOSE TO FULL USE ( ITS PRODUCTIVE RES\RCES )\T CONT9U\SLY DEVALUAT+ ITS MONEY4 ,IF GOLD %\LD BE COME UNACCEPTABLE1 A /EADILY DEPRECIAT+ DOLL> W\LD BE EV5 MORE SO4 ,A P>TIAL ?\< QUITE LIMIT$1 DE-NATIONALIZATION ( MONET>Y RES]VES HAS ALREADY BE5 A*IEV$ ?R\< ! E/ABLI%M5T ( ! ,9T]NATIONAL ,MONET>Y ,FUND1 :I*1 AMONG O!R ?+S1 BE>S WITNESS TO ! CONTRADICTORY =CES ?AT WORK )9 ! 9T]NATIONAL PRIVATE 5T]PRISE ECONOMY4 ,ON ! ONE H&1 ! CAPITALI/S ( EA* NATION COMPETE ) CAPITALI/S ( O!R NATIONS BY ALL AVAIL ABLE MEANS1 9CLUD+ MONET>Y MEANS4 ,ON ! O!R H&1 !RE IS A G5]AL DESIRE TO LIMIT ?IS COMPETITION ?R\< 9T]NATIONAL >RANGEM5TS ?AT WILL BR+ A MODICUM ( REGULATION & /ABILITY 9TO TRADE & MONEY RELATIONS4 ,! ,I4,M4,F4 WAS TO HELP ITS MEMB] NATIONS ALLEVIATE !IR PAYM5TS PROBLEMS BY SUPPLEM5T+ !IR RES]VES4 ,ITS GOLD & CURR5CY HOLD+S >E AVAILABLE TO MEMB] NATIONS ON ! BASIS ( AN AGRE$-UPON QUOTA SY/EM4 ,C\NTRIES 9 PAYM5TS DIFFICULTIES MAY DRAW UPON ! ,FUND'S RES\RCES TO AVOID 9TRODUC+ RE/RICTIVE MEASURES AT HOME :ILE AWAIT+ A REV]SAL ( ! PAYM5TS SITUATION4 ,DEFICITS >E ?\Y OCCURR5CES4 ,BUT IF !Y %\LD BE PROLONG$1 A C\NTRY'S CR$IT ) ! ,FUND WILL EXHAU/ ITSELF1 & ITS BORR[+S FROM ?IS S\RCE WILL DEEP5 ITS PAYM5TS DILEMMA4 ,H[EV]1 ! ,I4,M4,F HAS WORK$ REASONABLY WELL 9 ITS LIMIT$ WAY4 ,= ?IS REASON IT HAS BE5 SUGGE/$ ?AT ! ,I4,M4,F BECOME ! SOLE TRU/EE ( ITS MEMB] NATIONS' MONEY RES\RCES4 ,PROPOSALS ) REG>D TO ! E/ABLI%M5T ( SU* AN 9T]NATIONAL MONET>Y AU?ORITY DIFF] 9 DETAILS1 SU* AS ! SPAC+ ( ! TRANS=MATION P]IOD FROM ! NATIONAL TO 9T]NATIONAL MONET>Y CONTROLS & ! NATURE ( ! RES]VES1 I4E41 IF !Y %\LD 9VOLVE A TOTAL DE-MONETIZATION ( GOLD1 OR CONT9UE TO USE GOLD AS MONET>Y RES]VES 9 SOME FA%ION OR ANO!R4 ,BUT :ATEV] ! PECULI>ITIES ( ! V>I\S SUGGE/IONS BR\E BASICALLY EXT5SIONS ( ! NATIONAL MANIPULAT$ MONET>Y SY/EM TO ! 9T]NATIONAL SC5E4 ,9 ORD] = !M TO SUCCE$1 ! 9T]NATIONAL MONET>Y AU?ORITY W\LD HAVE TO BE AS FREE AS NATIONAL GOV]NM5TS >E N[ TO CREATE MONEY AT ITS [N DISCRETION1 TO SUPPLY IT TO ! MEMB] NATIONS 9 ACCORDANCE ) !IR P>TICUL> & *ANG+ NE$S1 & TO DET]M9E ECONOMIC ACTIVITY OV] ! :OLE >EA COMPRIS+ ITS #af MEMB] NATIONS4 ,9 BRIEF1 IT W\LD HAVE TO FUNCTION AS A F9ANCIAL WORLD GOV]NM5T - AN UNREALIZABLE CAPITALI/ UTOPIA4 ,TO TURN ! ,I4,M4,F4 9TO A GIGANTIC C5TRAL BANK1 HOLD+ ! RES]VES ( ALL NATIONS1 & EMP[]$ TO CREATE MONEY1 W\LD MAKE ! FUR!R KEEP+ ( GOLD RES]VES SUP]FLU\S4 ,! GOLD BASE ( MONEY C\LD BE REPLAC$ BY 9T]NATIONAL LAW4 ,! GOLD 9 ! VAULTS ( ! ,WORLD ,BANK W\LD BELONG TO ALL & NOBODY2 COMMODITY-MONEY W\LD HAVE COME TO AN 5D4 ,! ELIM9ATION ( GOLD AS MONET>Y RES]VE W\LD MEAN ! ELIM9ATION ( MONEY 0RES]VES0 ALTOGE!R4 ,ONLY SO LONG AS MONEY RETA9S AT LEA/ 9 P>T ! =M ( COMMODITY-MONEY WILL IT RETA9 ITS *>ACT] AS ! 9DEP5D5T =M ( EX*ANGE-VALUE1 AS CAPITAL4 ,! 9T]NATIONAL MONEY RE=M F9ALLY AGRE$ UPON 9 #aifg 7SUBJECT TO GOV]NM5T RATIFICATIONS7 PAID NO ATT5TION TO ! MULTITUDE ( PRELIM9>Y PROPOSALS1 9CLUD+ ?OSE MODEL$ ON ,KEYNES' ,9T]NATIONAL ,CLE>+ ,UNION1 OR WORLD BANK1 SE5 AS AN 9/RUM5T CAPABLE ( PROVID+ = ALL ! *ANG+ MONET>Y NE$S ( WORLD COMM]CE4 ,BUT IT DID AGREE UPON ! DELIB]ATE CREATION ( A NEW TYPE ( MONEY ) :I* TO BOL/] ! RES]VES ( ! MEMB] NATIONS ( ! ,I4,M4,F41 SO AS TO HELP !M OV]COME >IS+ PAYM5TS DIFFICULTIES4 ,! NEW 0MONEY0 CONSI/S ( SO-CALL$ ,SPECIAL ,DRAW+ ,RIE ALLOTT$ TO ! NATIONS 9 PROPORTION TO !IR PREVI\SLY E/ABLI%$ ,I4,M4,F4 QUOTAS4 ,?IS NEW 0MONEY0 IS1 ( C\RSE1 CR$IT MONEY2 BUT IT HAS BE5 PROVID$ ) A GOLD GU>ANTEE TO GIVE IT ! SEMBLANCE ( REAL MONEY4 ,! MONEY RES\RCES ( ! ,I4,M4,F41 I4E41 GOLD1 DOLL>S & O!R CURR5CIES1 PROVIDE A 0MONET>Y POOL0 FROM :I* MEMB] NATIONS CAN DRAW %ORT-TIME LOANS TO BRIDGE A NEGATIVE PAYM5TS SITUATION4 ,9 CONTRA/1 ! ,S,D,RS >E NOT BORR[+S BUT 0ADDITIONS0 TO ! WORLD'S MONEY SUPPLY1 EV5 ?\< !Y HAVE NO MAT]IAL C\NT] P>T SU* AS GOLD OR CONV]TIBLE CURR5CIES4 ,! MONEY POOL ( ! ,I4,M4,F4 HAS NOT PREVI\SLY BE5 US$ AS A BASE = ISSU+ NEW MONEY2 9 FACT1 IT WAS P>T ( ! 0MONEY RES]VES0 ( ALL ITS MEMB]S 9 =M ( !IR SUBSCRIPTIONS TO ! ,FUND4 ,?IS SAME MONEY IS N[ ALL[$ TO FUNCTION AS AN 9DEP5D5T 09T]NATIONAL MONEY RES]VE0 & AS A BACK+ = ! ,S,D,RS4 ,IT IS A FUR!R R$UCTION ( ! REAL MONEY BASE ( CR$IT MONEY ON AN 9T]NATIONAL SCALE1 OR ! DILUTION ( ! MONET>Y *>ACT] ( ! 05L>G$ RES]VES0 ( ! NATIONS ( ! ,9T]NATIONAL ,MONET>Y ,FUND4 ,PRESUMABLY1 ! !ORY BEH9D ! RE=M IS BAS$ ON ! FE> ?AT 9T]NATIONAL TRADE MIY TR\BLES1 :I* W\LD !N LEAD TO A CONTRACTION ( PRODUCTION4 ,9CREAS+ WORLD TRADE1 IT IS SAID1 REQUIRES A GR[+ MONEY SUPPLY4 ,:ILE DOME/ICALLY GOV]NM5TS CAN >RANGE AN 9CREASE ( ! MONEY SUPPLY 9 ACCORDANCE ) ! GR[+ VOLUME ( BUS9ESS1 IT HAS NOT BE5 POSSIBLE TO MANAGE ! 9T]NATIONAL MONEY SUPPLY4 ,! ,SPECIAL ,DRAW+ ,RIE A FIR/ ATTEMPT 9 ?IS DIRECTION4 ,!Y >E NECESS>Y1 IT IS SAID1 BECAUSE ! 9CREASE ( ! II MONEY SUPPLY VIA ! GR[? ( RES]VES HAS BE5 DEP5D5T ON GOLD PRODUCTION & ! GOLD M>KET1 :I* NOT ONLY >E HI MORE SL[LY ?AN ! VOLUME & VALUE ( 9T]NATIONAL TRANSACTIONS4 ,ACTUALLY1 H[EV]1 ! WORLD'S GOLD RES]VES HAVE 9CREAS$ 9 ACCORDANCE ) ! 9CREASE ( 9T]NATIONAL TRADE4 ,IF GOLD /OCKS FALL BEH9D ! 9CREAS+ REQUIREM5TS ( 9T]NATIONAL TRADE IT IS NOT SO MU* BECAUSE ( AN ACTUAL IMPOSSIBILITY ( 9CREAS+ ! PRODUCTION ( GOLD1 AS BECAUSE ( A RELUCTANCE TO IMMOBILIZE CAPITAL BY HOLD+ IT 9 ! =M ( GOLD4 ,BE ?IS AS IT MAY1 ! ,S,D,RS >E SUPPOS$ TO TAKE ! PLACE ( GOLD AS ! ULTIMATE RES\RCE = PUR*AS+ O!R CURR5CIES4 0,GOLD RES]VES0 >E ?US CREAT$ )\T ! PRODUCTION ( GOLD1 :I* CAN ONLY MEAN ?AT ! TOTAL GOLD COV] IS BE+ DECREAS$ TO ! SAME EXT5T AS ! TOTAL MONEY SUPPLY IS 9CREAS$4 ,( C\RSE1 AFT] IT IS G5]ALLY ACCEPT$ TO CREATE MONET>Y RES]VES \T ( ?9 AIR RA!R ?AN BY PRODUC+ !M1 ! ,S,D,RS WILL FUNCTION AS RES]VE SUPPLEM5TS 9 ! SAME WAY ?AT PAP] MONEY FUNCTIONS AS COMMODITY-MONEY4 ,9/EAD ( GOLD1 ,S,D,RS CAN !N BE TRANSF]R$ FROM ONE C\NTRY TO ANO!R 9 EX*ANGE = CURR5CIES TO /RAIITIES 9 PAYM5TS BALANCES4 ,BUT LIKE ! SUPPLY ( GOLD1 SUPPLY ( ,S,D,RS IS ALSO LIMIT$1 & NATIONS ) A P]SI/5T UNFAVORABLE PAYM5TS BALANCE >E 9 DANG] ( EXHAU/+ BO? !IR CONV5TIONAL RES]VES & !IR ALLOTM5T ( ,S,D,R C\NTRIES ) A P]SI/5T FAVORABLE PAYM5TS BALANCE WILL ACCUMULATE ! SUPPLEM5T>Y ,S,D,RS AS WELL AS ! MONET>Y GOLD4 ,O!R PROCESSES WILL M]ELY TAKE A LONG] TIME4 ,!RE IS ALWAYS ! IDEA ?AT TRADE & PAYM5TS DISBALANCES >E ONLY TEMPOR>Y OCCURR5CES1 TO BE 5D$ SOON] OR LAT] BY ! SELF-ASS]TION ( ! EQUILIBRIUM T5D5CIES ( ! M>KET4 ,BUT AS ?IS SEEMS N[ TO HAPP5 RA!R LAT] ?AN SOON]1 TIME MU/ BE WON4 ,! ACCESS TO GREAT] MONET>Y RES]VES IS TO GIVE NATIONS MORE TIME TO REV]SE AN UNFAVORABLE TRADE & PAYM5TS POSITION1 & TO 5ABLE !M TO DO SO MORE GRADUALLY1 SO AS TO AVOID ! %OCK ( SUDD5 RETR5*M5TS & ! CONSEQU5T CONTRACTION ( 9T]NATIONAL TRADE4 ,JU/ AS DEFICIT-F9ANC+ ON ! NATIONAL SCALE F9DS ITS RATIONALE 9 ITS PO/PONEM5T EFFECT - ?AT IS1 9 ! IDEA ?AT ! M]E DELAY ( A CRISIS SITUATION BY GOV]NM5T-9DUC$ PRODUCTION MAY LEAD 9TO A NEW BUS9ESS UPSW+ CAPABLE ( BR++ =? PR(ITS L>GE 5\< TO COMP5SATE = ! NON-PR(ITABLE P>T ( PRODUCTION - SO ! MANAG$ 9T]NATIONAL MONEY SUPPLY IS ?\Y CRISIS & BY DO+ SO P]HAPS AVOID IT ALTOGE!R4 ,BUT MANIPULATION ( ! 9T]NATIONAL MONEY SUPPLY1 JU/ LIKE DEFICIT-F9ANC+1 IS NECESS>ILY LIMIT$ BY ! M>KET *>ACT] ( ! CAPITALI/ ECONOMY4 ,IF IT W]E NOT LIMIT$1 PAYM5TS W\LD NOT NE$ TO BALANCE & WORLD TRADE W\LD LOSE ITS PRIVATE-PROP]TY NATURE2 DEBTS W\LD NOT BE PAID & PR(ITS NOT COLLECT$1 & TRADE W\LD HAVE LO/ ITS CAPITALI/ *>ACT]4 ,AS IT IS1 H[EV]1 ! PO/PONEM5T ( MONET>Y CRISES MAKES S5SE ONLY ON ! ASSUMPTION1 CONTR>Y TO ALL EVID5CE ?AT !RE IS A T5D5CY T[>D EXT]NAL EQUILIBRIUM :I* WILL WORK ITSELF \T IF GIV5 A *ANCE TO DO SO4 ,!RE IS NO NE$ TO GO 9TO ! SUGGE/$ ADM9I/RATIVE DETAILS ( ! PROJECT$ MONET>Y RE=M1 ! LESS SO BECAUSE IT IS NOT AT ALL C]TA9 ?AT IT WILL BECOME A REALITY4 ,EV5 IF IT DOES1 IT MAY /ILL UND]GO MANY ALT]ATIONS TO FIT ! SPECIAL NE$S OR POLICIES ( P>TICUL> NATIONS4 ,:AT IS ( 9T]E/ IS ! WIDE-SPREAD RECOGNITION1 IMPLI$ 9 ! RE=M1 ?AT ! NATIONALLY MANAG$ ECONOMY REQUIRES SOME DEGREE ( 9T]NATIONAL MANIPULATION 9 ADDITION TO & ABOVE ! 0REGULATORY0 M>KET =CES4 ,H[EV]1 ! CONTEMPLAT$ ATTEMPT AT MANAG+ ! 9T]NATIONAL MONEY SUPPLY IS A RA!R MODE/ YE>LY 9CREASE ( RES]VES BY BETWE5 #a4#d & #b4#h P] C5T ( ! EXI/+ RES]VES :I*1 9 #a#i#f#g1 AM\NT$ TO AB\T @s#g#a BILLION4 ,OV] A PROJECT$ FIVE-YE> P]IOD ?IS W\LD 9CREASE MONET>Y RES]VES BY BETWE5 #e & #a BILLION DOLL>S4 ,! USE AS WELL AS ! ACCEPTANCE ( ,S,D,R'S IS LIMIT$ & PROPORTIONAL ) RESPECT TO O!R RES]VES1 & !IR ACCEPTANCE IS TO BE REW>D$ BY A SMALL RATE ( 9T]E/ 9 AN ATTEMPT TO MAKE !M PREF]ABLE TO GOLD4 ,! NE$ = L>G] RES]VES RE/S ON ! ASSUMPTION ?AT 9T]NATIONAL TRADE EXP& 9 ! NE> FUTURE AS IT HAS 9 ! REC5T PA/1 ?AT IS1 AT AN AV]AGE RATE ( BETWE5 #g & #a P] C5T A YE>1 & ON ! P>ALLEL ASSUMPTION ?AT ?IS 9CREASE ( TRADE WILL COMPLICATE RA!R ?AN EASE ! PAYM5TS PROBLEMS4 ,RES]VES MU/ /ILL BE HELD 9 GOLD OR 9 ACCEPTABLE 9T]NATIONAL MONEY2 & MONEY IS ACCEPTABLE ONLY SO LONG AS IT IS CONV]TIBLE 9TO GOLD4 ,MO/ ,EUROPEAN NATIONS KEEP ! GREAT BULK ( !IR RES]VES 9 GOLD4 ,SOME NATIONS1 ,CANADA & ,JAPAN = 9/ANCE1 KEEP ! SMALL] P>T ( !IR RES]VES 9 GOLD4 ,ELSE:]E 9 ! WORLD NATIONS HAVE MU* SMALL] TOTAL RES]VES & \T ( !SE SMALL] RES]VES MU* L[] PROPORTIONS 9 GOLD4 ,UNTIL #a#i#f#a1 ! ,UNIT$ ,/ATES KEPT ITS RES]VES 5TIRELY 9 GOLD4 ,PRES5TLY1 %E HOLDS SOME SMALL AM\NT 9 CONV]TIBLE =EIGN CURR5CIES4 ,AS A RESULT ( ,AM]ICA'S PAYM5TS DEFICIT1 MONET>Y GOLD /OCKS >E N[ MORE EV5LY DI/RIBUT$1 ! ,AM]ICAN %>E AM\NT+ TO AB\T #cg P] C5T ( ! 0FREE WORLD'S0 MONET>Y GOLD - APPROXIMATELY ! SAME AS IT WAS ?IRTY YE>S AGO4 ,! GOLD COV] ( ! ,AM]ICAN DOLL> WAS LEGALLY SET AT #be P] C5T ( ! TOTAL AM\NT ( ,F$]AL ,RES]VE NOTES 9 CIRCULATION & ! TOTAL DEPOSITS ( MEMB] BANKS 9 ! ,F$]AL ,RES]VE ,SY/EM4 0,BY ! 5D ( #a#i#f#d1 ! TOTAL DEPOSITS CAME TO #ai BILLION DOLL>S & ! NOTES 9 CIRCULATION TO #ce BILLION4 ,! COMB9$ TOTAL ( #$ BILLION DOLL>S CALL$ = A GOLD RES]VE ( #a#c4#e BILLION4 ,?IS LEFT AT ! TIME ONLY AB\T #a4#e BILLION DOLL>S ( FREE GOLD AS A RES]VE AGA9/ ! (FICIAL & UN(FICIAL =EIGN CLAIMS4 ,S9CE ! TOTAL REQUIR$ RES]VES T5D$ TO 9CREASE AT ! RATE ( APPROXIMATELY #ge MILLION A YE> BECAUSE ( ! NORMAL RISE 9 BUS9ESS ACTIVITY & BANK CR$IT AS WELL AS ,F$]AL ,RES]VE NOTES1 ?IS MEANT ?AT ! M>G9 ( FREE GOLD W\LD HAVE VIRTUALLY DISAPPE>$ SOME TIME 9 #a#i#f#f40.<#a#d.> ,PREVI\SLY UND] ,AM]ICAN LAW1 ! GOLD RES]VE PUT AN UPP] LIMIT TO ! RES]VE-CREAT+ & NOTE-ISSU+ P[]S ( ! ,F$]AL ,RES]VE ,SY/EM4 ,?IS RES]VE REQUIREM5T HAS BE5 REMOV$ & ! 5TIRE GOLD RES]VE S]VES N[ ONLY ! 9T]NATIONAL CONV]TIBILITY ( DOLL>S 9TO GOLD4 ,/ILL1 !RE >E ONLY @s#a#e BILLION ( MONET>Y GOLD4 ,) ! CONT9U\S CONV]SION ( =EIGN CLAIMS 9TO GOLD1 RESULT+ FROM ! CONT9U+ ,AM]ICAN PAYM5TS DEFICIT & ! DECREAS+ VALUE ( ! DOLL> - NOT 9 RELATION TO GOLD BUT 9 ITS ACTUAL BUY+-P[] - ! /EADY DECREASE ( ! GOLD HOLD+S W\LD IMPLY ! DECL9E ( ! DOLL> AS 9T]NATIONAL MONEY & AS A RES]VE SUB/ITUTE = GOLD4 ,?\< IT IS NOT IMM$IATELY NECESS>Y1 ! ,UNIT$ ,/ATES MU/ HALT ! DRA9 ( MONET>Y GOLD AS A LONG-RUN TR5D4 ,) 9FLATION NO LONG] *ECK$ BY RES]VE REQUIREM5TS1 ! DOLL> WILL BE LESS & LESS ACCEPTABLE = ! SETTLEM5T ( 9T]NATIONAL ACC\NTS1 & DOLL> HOLD+S WILL BE MORE READILY CONV]T$ 9TO GOLD4 ,AM]ICA1 !N1 MU/ HAVE AN ADEQUATE MONEY SUPPLY TO COPE ) ! PROBLEM ( NON-PR(ITABLE GOV]NM5T-9DUC$ PRODUCTION - N[ ACC5TUAT$ BY ! W> 9 ,VIETNAM - & AN ADEQUATE GOLD RES]VE TO ASSURE ! DOLL>'S 9T]NATIONAL POSITION4 ,BUT !SE >E CONTRADICTORY NE$S2 BECAUSE ! V]Y PROCESS :I* 9CREASES ! SUPPLY ( DOLL>S ALSO R$UCES ! GOLD RES]VE4 ,IT IS BECAUSE ( H] DECL9+ GOLD RES]VE ?AT ! ,UNIT$ ,/ATES SUPPORT$ ! PROJECT$ 9T]NATIONAL MONEY RE=M MORE 5?USIA/ICALLY ?AN O!R NATIONS4 ,EUROPEAN C\NTRIES1 ) AMPL] RES]VES1 DID NOT SEE ! URG5CY ( ! NE$ = NEW & IMAG9>Y RES]VES AT A TIME :5 ,AM]ICA'S SIZABLE BALANCE ( PAYM5TS DEFICIT PROVIDES ! NECESS>Y 0LIQUIDITY0 = ! GIV5 9T]NATIONAL TRADE4 ,UND] !SE CONDITIONS1 ! CREATION ( NEW 0RES]VES0 MIT ( ! ,UNIT$ ,/ATES & O!R DEFICIT NATIONS TO OV]COME !IR PAYM5TS DIFFICULTIES :I*1 9 TIME1 W\LD DIM9I% 9T]NATIONAL TRADE EV5 MORE EFFECTIVELY ?AN A R$UCTION ( ,AM]ICA'S =EIGN EXP5DITURES & CAPITAL EXPORTS4 ,BUT AS ! CONT9U$ PR(ITABILITY ( ,AM]ICAN CAPITAL DEM&S EXT]NAL EXPANSION1 & CONSEQU5TLY ! EXP5DITURES ( IMP]IALISM1 !RE IS NO *ANCE TO OV]COME ! ,AM]ICAN DEFICIT EXCEPT BY AN 9CREASE ( 9COME FROM ABROAD ?R\< CAPITAL IMPORTS & BY AN 9CREASE ( ,AM]ICA'S FAVORABLE BALANCE ( TRADE4 ,H[EV]1 ALL CAPITALI/ NATIONS %>E !SE NE$S1 = :I* REASON ,EUROPE'S RECOV]Y1 H[EV] NECESS>Y1 C\LD ONLY BE ( DUBI\S B5EFIT TO ! ,UNIT$ ,/ATES4 ,NOT)/&+ ALL DECL>ATIONS1 & EV5 ACTUAL POLICIES1 TO ! CONTR>Y1 IT CANNOT BE ,AM]ICA'S OBJECTIVE TO BR+ AB\T A WELL-FUNCTION+ WORLD ECONOMY AT ! EXP5SE ( H] [N SUP]IOR POSITION4 ,AM]ICA'S DOM9ANCE IS ! RESULT NOT ONLY ( H] [N PRODUCTIVE EF=TS BUT ALSO ( ! OCCURR5CE ( TWO WORLD W>S :I* LEFT ! ,EUROPEAN ECONOMIES F> BEH9D ! ,AM]ICAN4 ,AT LEA/ 9 P>T1 ! ,UNIT$ ,/ATES [ES H] EXCEPTIONAL GR[? TO EXCEPTIONAL CIRCUM/ANCES4 ,SOME ( ! BLESS+S ( !SE CIRCUM/ANCES >E DISAPPE>+ AS ! RECOV]Y ( ! ,EUROPEAN ECONOMIES N>R[S ! GAP BETWE5 ,EUROPEAN & ,AM]ICAN PRODUCTION & PRODUCTIVITY4 ,BECAUSE ,EUROPEAN EXPANSION IS BY %E] NECESSITY GE>$ TO ! WORLD M>KET1 ITS CONT9U$ PR(ITABILITY DEP5DS ON A SUCCESSFUL P5ETRATION ( ,AM]ICAN & EXTRA-,AM]ICAN M>KETS4 ,EUROPEAN CAPITAL MU/ COMPETE ) ,AM]ICAN CAPITAL & ) ! ,EA/]N P[] BLOC1 :OSE EXI/5CE SETS FUR!R LIMITS TO ! EXT]NAL EXPANSION ( BO? ,EUROPEAN & ,AM]ICAN CAPITALISM4 ,) 9CREAS+ COMPETITION FROM ,EUROPE & ! ,EA/1 ,AM]ICA'S EXCEPTIONAL POSITION DUR+ ! FIR/ HALF ( ! TW5TIE? C5TURY SEEMS TO BE DRAW+ TO A CLOSE4 ,! W> & PO/W> DISRUPTIONS ( ! 0TRADITIONAL PATT]N0 ( TRADE W]E TO BE 5D$ BY A RETURN TO 0NORMALCY0 A*IEV$ ?R\< ! /ABILIZATION ( EX*ANGE-RATES & ! GRADUALLY ( ALL DISCRIM9ATORY TRADE PRACTICES4 ,AL?\< ! =MATION ( ! ,EUROPEAN TRAD+ BLOCS WAS ACCOMPANI$ BY HOPES ?AT !Y W\LD EV5TUALLY M]GE & EXT5D ,EUROPEAN FREE-TRADE 9TO A FREE-TRAD+ WORLD1 NEI!R EXPECTATION HAS BE5 REALIZ$4 ,! GOAL ( AN ALL-,EUROPEAN M>KET BECOMES MORE DI/ANT ) EV]Y YE> ( ! TRAD+ BLOCS' EXI/5CE4 ,NEWLY EVOLV+ PATT]NS ( COMPETITION & CONTROL T5D TO H>D51 & ! BREAK+-UP ( E/ABLI%$ REGIONAL >RANGEM5TS MAY PROVE EV5 MORE DIFFICULT ?AN OV] COM+ NATIONAL PROTECTIVE PRACTICES4 ,IF ONE GR\P %\LD GA9 EXCEPTIONAL ADVANTAGES BY VIRTUE ( ! REGIONAL >RANGEM5T1 IT WILL NOT SACRIFICE ?IS ADVANTAGE TO ! PR9CIPLE ( FREE TRADE1 EV5 IF RE/RICT$ TO ! 9TRA-,EUROPEAN M>KET4 ,= 9/ANCE1 ,GREAT ,BRITA9'S CURR5T READ9ESS TO 5T] ! ,COMMON ,M>KET1 9 ORD] TO P>TAKE 9 ! MORE RAPID EXPANSION ( ! ,WE/-,EUROPEAN ECONOMY & TO F9D REFUGE BEH9D ! COMMON T>IFF WALL1 NOT ONLY IS SABOTAG$ BY ! P[]S PR(IT+ BO? ECONOMICALLY & POLITICALLY BY EXI/+ >RANGEM5TS BUT MAY WELL DISAPPE> IF & :5 ! ,COMMON ,M>KET ECONOMIES BEG9 TO /AGNATE4 ,T>IFFS & TRADE 9 ! PO/W> WORLD W]E TO BE DET]M9$ MULTILAT]ALLY1 ) DUE CONSID]ATION TO BO? ! SPECIAL BUT 0TEMPOR>Y0 NE$S ( 9DIVIDUAL NATIONS & ! COMMON GOAL ( A T>IFF-FREE WORLD4 ,UND] ! ,G5]AL ,AGREEM5T ON ,T>IFFS & ,TRADE 7,G,A,T,T71 !RE BEGAN 9 #aidg A PROCESS ( MULTILAT]AL T>IFF R$UCTIONS :I*1 #b YE>S LAT]1 79 ! SO-CALL$ ,K5N$Y ,R\ND NEGOTIATIONS7 BR\IFFS AMONG 9DU/RIAL NATIONS TO !IR L[E/ PO9T4 ,H[EV]1 ! AGREEM5TS W]E H>DLY MADE PUBLIC :5 NEW PROTECTIONI/ MEASURES W]E 9TRODUC$ 9 ! ,AM]ICAN ,CONGRESS4 ,RIGID IMPORT QUOTAS W]E ASK$ = MORE ?AN A ?IRD ( ALL DUTIABLE IMPORTS1 9CLUD+ ITEMS SU* AS /EEL1 OIL1 *EMICALS LEAD1 TEXTILES1 MEAT1 & DAIRY-PRODUCTS - ?IS DESPITE ! FACT ?AT ,AM]ICA /ILL EXPORTS MORE ?AN %E IMPORTS4 ,IF 5ACT$1 ( C\RSE1 SU* MEASURES W\LD LEAD TO RETALIATIONS BY ALL C\NTRIES AFFECT$ & ! EXPECT$ 9CREASE ( TRADE BY WAY ( T>IFF R$UCTIONS W\LD NOT MAT]IALIZE4 ,9 ANY CASE1 ! LIB]ALIZATION ( TRADE CANNOT ALT] EXI/+ ECONOMIC DIFFICULTIES1 = !SE DIFFICULTIES L$ TO ! TRADE RE/RICTIONS 9 ! FIR/ PLACE4 ,! GR[? ( 9T]NATIONAL TRADE DUR+ ! LA/ DECADE1 REA*+ 9 #aifg ! EQUIVAL5T ( @s#b BILLION1 WAS ( C\RSE DUE TO ! EXPANSION ( PRODUCTION4 ,9 ! 9DU/RIAL NATIONS ! RATE ( 9CREASE 9 TRADE WAS EV5 FA/] ?AN ?AT 9 PRODUCTION1 9DICAT+ ! GR[+ 9T]NATIONAL SPECIALIZATION ( 9DU/RIAL PRODUCTION & ! RISE ( MULT9ATIONAL CORPORATIONS4 ,H[EV]1 AL?\< PR(ITS >E REALIZ$ 9 CIRCULATION1 !Y MU/ FIR/ BE MADE AT ! PO9T ( PRODUCTION4 ,IF PR(IT-PRODUCTION DECL9ES1 ! REALIZABLE PR(ITS ALSO DECL9E4 ,GOV]NM5T-9DUC$ PRODUCTION CAN MA9TA9 A NECESS>Y VOLUME ( PRODUCTION DESPITE ITS P>TIAL LOSS ( PR(ITABILITY4 ,AL?\< ! 5D-PRODUCT ( GOV]NM5T-9DUC$ PRODUCTION 7) SOME EXCEPTIONS7 IS NOT M>KETABLE1 ITS 9T]M$I>Y PROCESSES 5T] 9TO NATIONAL & 9T]NATIONAL M>KET RELATIONS4 ,! FACT ?AT TRADE 9CREASES ) ! 9CREASE ( PRODUCTION1 & LATELY EV5 FA/] ?AN PRODUCTION1 ALT]S 9 NO WAY ! DECREAS+ PR(ITABILITY ( CAPITAL4 ,! PR(ITS TO BE REALIZ$ ON ! M>KET BY WAY ( TRADE >E NO L>G] ?AN ?OSE BR\G] PRODUCTION1 & 9DICATES AN 9T5SIFY+ COMPETITION = ! %R9K+ PR(ITS ( A GR[+ WORLD PRODUCTION4 ,:ILE ! RATE ( 9CREASE ( 9T]NATIONAL TRADE IS DET]M9$ BY ?AT ( PRODUCTION1 ! MIX$ *>ACT] ( PRES5T-DAY CAPITALISM EXCLUDES AN EFFECTIVE CONTROL ( M>KET & PAYM5TS RELATIONS4 ,! MIXTURE ( FREE & CONTROLL$ PRODUCTION1 ( FREE & CONTROLL$ TRADE1 EXCLUDES BO? AN 0AUTOMATIC0 & A 0CONTROLL$0 9TEGRATION ( WORLD ECONOMY4 ,IT DOES NOT EXCLUDE ECONOMIC MANIPULATION1 TO BE SURE2 BUT ?IS MANIPULATION1 :I* CAN ONLY ATT5D P>TICUL>I/IC 9T]E/S1 WILL NOT S]VE ! ACTUAL NE$S ( ! WORLD ECONOMY4 #a4 ,HILF]D+1 ,DAS ,F9ANZKAPITAL1 ,WI51 #a#i#a4 #b4 ,K4 ,M>X1 ,FREE ,TRADE1 ,NEW ,YORK1 #a#i#b#a1 P4 #d#b4 #c4 ,IBID4 #d4 ,IBID4 #e4 ,J4 ,H4 ,WILLIAMS1 ,ECONOMIC ,/ABILITY 9 A ,*ANG+ ,WORLD1 ,NEW ,YORK1 L P4 #bd #f4 ,IBID41 P4 #c#h4 #g4 ,W4 ,L4 ,?ORP1 ,TRADE1 ,AID1 OR ,:AT81 ,AMH]/1 #a#i#e#d1 P4 #a#h#c4 #h4 ,IBID4 #i4 ,R4 ,E4 ,FL&]S1 ,! ,AM]ICAN ,C5TURY1 ,CAMBRIDGE1 #a#i#e1 P4 #d#i4 #a4 ,P4 ,RIC>D1 ,HEAD ( ! ,FR5* ,/EEL ,F$]ATION1 9 ! ,NEW ,YORK ,TIMES1 ,FEBRU>Y #b#b1 #a#i#e#e4 #a#a4 ,AU/RIA1 ,D5M>K1 ,NORWAY1 ,PORTUGAL1 ,SW$51 ,SWITZ]L& #a#b4 ,R4 ,V]NON1 ,TRADE ,POLICY 9 ,CRISIS1 ,PR9CETON1 #a#i#e#h1 P4 #ba #a#c4 IBID "94 ,9 ! SPR+ ( #a#i#f#h1 ?IS SUGGE/ION BECAME HALF A REALITY0 ?R\< ! E/ABLI%M5T ( A TWO-PRICE SY/EM = GOLD4 ,9 ORD] TO >RE/ ! RIS+ PRICE ( GOLD )\T SELL+ MONET>Y GOLD ON ! GOLD M>KET1 ! MONET>Y AU?ORITIES P>TICIPAT+ 9 ! ,LONDON GOLD POOL DECID$ TO LET ! GOLD PRICE 9 ! PRIVATE M>KET BE DET]M9$ BY SUPPLY & DEM& :ILE C5TRAL BANKS W\LD CONT9UE TO BUY & SELL GOLD TO ONE ANO!R AT ! FIX$ ,UNIT$ ,/ATES PRICE ( @s#c#e AN \NCE4 ,?IS MOVE WAS EXPECT$ TO BR+ ! GOLD PRICE D[N )\T A FUR!R DEPLETION ( ! MONET>Y GOLD /OCK4 ,:ILE HI<] PRICES 9 ! PRIVATE M>KET W\LD MAKE C5TRAL BANKS & PRIVATE F9ANCIAL 9/ITUTIONS LESS WILL+ TO HOLD DOLL>S1 GOLD PRICES BEL[ ! (FICIAL RATE W\LD DEVALUATE ! GOLD HELD 9 MONET>Y RES]VES4 ,IT IS HOP$1 H[EV]1 ?AT ! COMMODITY PRICE ( GOLD WILL NOT DEVIATE TOO F> 9 EI!R DIRECTION FROM ! MONET>Y PRICE4 ,BUT ) ! GR[+ DEM& = GOLD & ! CONT9U+ DEPRECIATION ( ! DOLL>1 ! FREE M>KET GOLD PRICE ( MORE ?AN @s#c#e AN \NCE WILL MO/ PROBABLY BE SU/A9$ & ! DISP>ITY BETWE5 (FICIAL & FREE M>KET PRICE IS B\ND TO RECREATE ! OLD DIFFICULTIES ?AT L$ TO ! TWO-PRICE SY/EM = GOLD4 #a#d4 ,P4 ,D\GLAS1 ,AM]ICA 9 ! ,M>KET ,PLACE1 ,NEW ,YORK1 #a#i#f#f1 P4 #b#i#a4 ,FROM 3 ,M>XI/S4ORG4 ,*RONOLOGY 3 ,M>* #c1 #bba 3 ,*APT] #ag -- ,ADD$4 FILE G5]AT$ FROM 3 HTTP3_/_/REVOLTLIB4COM_/