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Source link: http://archive.mises.org/9638/hazlitt-saw-it-then-and-now/

Hazlitt Saw It Then and Now

March 19, 2009 by

Henry Hazlitt was a leading editorialist for the New York Times from 1934 until 1946. His career at the paper, however, abruptly ended because of the articles collected in this book. He closely covered the Keynesian-inspired Bretton Woods Agreement of 1944, He wrote that the attempt to fix exchange rates and peg world currencies to the dollar which in turn was fixed to gold would not and could not last.

Hazlitt saw that this was not a real gold standard but a complete fake. It did not offer convertibility in a manner that would instill monetary discipline. It trusted governments to maintain a sound money policy with no means of guaranteeing that they would do so. He said, then, that this was not a viable system, and predicted its complete breakdown in time.

Instead, he urged that every country be responsible for the soundness of its own currency. Only that system would produce stability of over time.

He said that the result of trusting governments and tying their fates together would be inflation and the collapse of what remained of sound money.

It’s hard to imagine that such truth-telling thoughts on monetary systems would have appeared as New York Times editorials – not op-eds but the actual editorial position of the paper itself

Sadly, it didn’t last. Tremendous pressure was applied to the New York Times to stop opposing the agreement. Hazlitt would not give in, and kept writing and calling it as he saw it. No one could refute him. In the end, of course, he was pushed out, and the paper reversed its stance.

But who was right? Hazlitt of course! The purpose of this book, then, is to memorialize his brilliance and document the fact that Hazlitt was correct in every detail.

At the suggestion of Hazlitt himself, this book was put together by George Koether, who worked in the archives for months to gather all the documentation of how this great journalist of liberty went about his work. It includes a detailed narration by Koether himself.

It ends with a wonderful epilogue written in 1983. Hazlitt urges an end to inflation by a simple step: stop inflating! He furthers urges the establishment of a genuine gold dollar.

Hazlitt finishes with an intriguing suggestion: “We could of course return to a merely private gold standard, but this is likely to happen only by default, when the paper dollar has become worthless, and millions of Americans have been ruined.”

{ 10 comments }

William Rader March 19, 2009 at 10:05 am

It looks as if I have another Henry Hazlitt book to add to my collection!

Don Lloyd March 19, 2009 at 10:51 am

Jeffrey,

“He wrote that the attempt to fix exchange rates and peg world currencies to the dollar which in turn was fixed to gold.”

This sentence seems to be missing a phrase that would give it meaning.

Regards, Don

J Cortez March 19, 2009 at 10:54 am

How does the New York Times go from Hazlitt to Krugman? From logical and concise to irrational and convoluted. Talk about a decline.

Dennis March 19, 2009 at 12:01 pm

Unfortunately, I believe that the shift at the New York Times closely mirrors the degradation in economic reasoning that has generally taken place over the past several decades amongst academics, the media, and educated laymen.

Greg Feirman March 19, 2009 at 12:07 pm

So this book is just a collection of editorials? Didn’t he write another book on inflation in the 1970s? Which one is better overall?

Greg Feirman March 19, 2009 at 12:07 pm

So this book is just a collection of editorials? Didn’t he write another book on inflation in the 1970s? Which one is better overall?

Miklos Hollender March 19, 2009 at 4:36 pm

What? I may be thick but if all currencies were tied to the dollar and the dollar to gold then it WAS a gold standard. Otherwise what do the verbs “tied” or “pegged” even mean?

Fullcarry March 19, 2009 at 8:14 pm

Centrally controlled gold standards are doomed from the start. Better to protect property rights, especially the right to any asset such as gold.

Let the government have its money as long as I can chose mine.

Bruce Koerber March 19, 2009 at 8:38 pm

Dedicated to the spirit of Henry Hazlitt:

Apolitical Political Commentary!
Thursday, March 19, 2009

Washington, D.C. Subculture Of Graft.

Being almost a lone voice in a den of thieves is something Congressman Ron Paul has experienced for many years. The fact that there is some attention being given to what he has to say (http://www.youtube.com/watch?v=sKiJh-BOLd0) is a sign of progress but the subculture in Washington, D.C., made up of unprincipled politicians, is as difficult to change as the welfare mother who has become totally dependent.

The illegitimate offspring of these politicians are the plethora of unconstitutional legislation that gets their rubber stamp, not coincidentally because it has some kind of graft feedback loop to keep them in office.

Will this political class subculture voluntarily return to the Constitution as the rule of law? This question will be answered in this generation. If no then a future generation will have to restore a Constitutional government after much destruction by the ego-driven interventionists. If yes then the spirit of America still is alive in the hearts of enough people to make this happen.

http://www.youtube.com/watch?v=sKiJh-BOLd0

Jon Evans March 20, 2009 at 11:47 am

“Money, unlike other forms of government debt, pays zero interest
and has infinite maturity. The monetary authorities can issue as much
money as they like. Hence, if the price level were truly independent of
money issuance, then the monetary authorities could use the money they
create to acquire indefinite quantities of goods and assets. This is mani-
festly impossible in equilibrium. Therefore money issuance must ulti-
mately raise the price level, even if nominal interest rates are bounded
at zero.”

BEN S. BERNANKE
Japanese Monetary Policy: A Case of
Self-Induced Paralysis? (1999)

http://www.iie.com/publications/chapters_preview/319/7iie289X.pdf

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