He applied the “Page 99 Test” to his new book, The Gold Standard at the Turn of the Twentieth Century: Rising Powers, Global Money, and the Age of Empire (Columbia University Press, 2010), and reported the following: Surprisingly enough (for me) page 99 is fairly representative of the themes in my new book The Gold Standard at the Turn of the Twentieth Century: Rising Powers, Global Money, and the Age of Empire.Learn more about The Gold Standard at the Turn of the Twentieth Century at the Columbia University Press website.
On page 99 I am in the final of three chapters about adoption of the gold standard in Argentina in the 1890s. In this chapter I discuss the law ostensibly establishing the gold standard – “Law 3871.”
The first two paragraphs wrap up a section about the Argentine statesman Carlos Pellegrini and his obsession with his “two utopias” of industrial protectionism (i.e., protective tariffs) and the gold standard (i.e., gold currency), which shaped his vision of the Argentine and world economy.
Pellegrini constructed a currency system for Argentina that took the core of nineteenth-century English economic institutions and turned it on its head to promote a protectionist, export driven model of the world economy more reminiscent of Friedrich List, or modern day China, than Adam Smith.
As a result, Argentine enthusiasts of English political economy opposed Pellegrini’s system because they believed it was not “the gold standard” in the English, laissez-faire sense that they knew.
And, in that, they were correct.
But rather than being an exception to the age, Pellegrini’s combination of English institutions with statist and protectionist ideas was common in what I call the “second nineteenth century” dominant in the years before World War I. It was here that a “first nineteenth century” reminiscent of globalization ideas and institutions of the 1990s gave way to a messier, less theoretical, and more power obsessed conception of the world economy.
As I write on page 99:That Pellegrini would resort to a cobbled together arrangement of nominal conversion, paper issues, devaluation, and protective tariffs is not itself especially surprising given Argentina’s economic conditions and the not all that different combinations in countries such as the United States, Japan, and Germany. This combination, however, fit awkwardly with English economic theory and the English image of the gold standard. It was thus among adherents of English political economy and English ideas of the supremacy of gold currency that Pellegrini’s currency proposals and Law 3871 had their fiercest critics. And it was this opposition that underlined the considerable distance between Law 3871 and what its hard money and laissez-faire critics regarded as the only “true and universal money” – gold.The final two paragraphs on page 99 start a new section about these traditional supporters of English political economy left behind by the protectionist and interventionist preferences of the age.
As I continue on page 99:The fact that Pellegrini’s currency proposals and Law 3871 were predicated on the state’s intervening in currency markets (and devaluing paper to prevent it from appreciating toward its nominal parity) made support from advocates of English political economy unthinkable. Add in the motives of protectionism and industrial promotion and there remained virtually no common ground uniting Pellegrini and his free trade, laissez-faire opponents.British institutions might be adopted, and the rhetoric of English liberalism might be employed in new nineteenth-century powers such as Germany, the United States, Argentina, and Japan. But the adoption worldwide of British economic institutions in the late-nineteenth century rested on bases fundamentally opposed to the British worldview and, ever more declining, British power. As a result, the late-nineteenth century world produced a globalized world economy radically at odds with that of the turn of the twenty first century.
--Marshal Zeringue
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