The gold standard, for me, stands for the imbevilents and the differences of how mporaries viewed things compared to us to day. So when you look of at the 19 twenties, and for a long time in 19 thirties, policy makers firmly believe they did the right thing in restoring and then upholding the gold standard. And it's important to understand the gold standard to understand the waxing and wading of globalization attas io change the view of economics taken by those who had ter theories of it.
Melvyn Bragg and guests discuss the system that flourished from 1870 when gold became dominant and more widely available, following gold rushes in California and Australia. Banknotes could be exchanged for gold at central banks, the coins in circulation could be gold (as with the sovereign in the image above, initially worth ยฃ1), gold could be freely imported and exported, and many national currencies around the world were tied to gold and so to each other. The idea began in Britain, where sterling was seen as good as gold, and when other countries rushed to the Gold Standard the confidence in their currencies grew, and world trade took off and, for a century, gold was seen as a vital component of the world economy, supporting stability and confidence. The system came with constraints on government ability to respond to economic crises, though, and has been blamed for deepening and prolonging the Great Depression of the 1930s.
With
Catherine Schenk
Professor of Economic and Social History at the University of Oxford
Helen Paul
Lecturer in Economics and Economic History at the University of Southampton
And
Matthias Morys
Senior Lecturer in Economic History at the University of York
Produced by Eliane Glaser and Simon Tillotson