Ludwig von Mises, “[Review of] The Gold Standard and its Future” (1935)

Mises’s review of the third, revised and enlarged edition of T. E. Gregory’s The Gold Standard and its Future (1934) combines admiration for Gregory’s monetary analysis with a fundamental objection: restoring a gold parity cannot by itself restore the credibility of the earlier monetary order. Mises first surveys the book’s explanation of the gold standard, its statistically supported account of British and American monetary policy, and its concluding assessment of a return to gold. He then shifts the question from monetary arrangements to the political commitments needed to sustain them.

The abandonment of the gold standard by the two leading nations of the world must not be judged from the standpoint of monetary policy only.

For Mises, departure from gold belongs to a wider movement toward autarchy and government control. He connects American monetary policy with the New Deal and British policy with imperial trade and agricultural intervention, while also invoking Germany, Russia, and Japan. The gold standard’s international character becomes a liability where governments treat imports as losses and seek to protect nominal wages. Even renewed statutory or international commitments cannot prevent future depreciation if domestic political objectives continue to justify it.

The central distinction is therefore between fixing a currency’s gold value temporarily and accepting a durable constraint on monetary discretion. Mises identifies this as his principal disagreement with Gregory:

My only objection to Professor Gregory's masterly explanations is that he discusses the problem of the return to the gold standard under the assumption that it could by itself re-establish the world's monetary organisation as it existed before 1931.

Britain and the United States, Mises argues, have replaced the metallic standard with a manipulated standard by accepting governmental responsibility for changing the monetary unit’s gold content in response to purchasing-power fluctuations. Unless that principle loses public legitimacy, stabilization means only that further depreciation is presently judged unnecessary. The conceptual issue is not simply whether currency is linked to gold, but whether its gold weight remains politically revisable.

This distinction grounds the review’s account of creditor confidence and international lending:

A return to the gold standard would therefore not restore confidence and would not re-establish international lending.

Mises points to interventions favoring debtors and to the failure of contractual safeguards to protect lenders. He questions the asymmetry of public opinion: rising gold purchasing power after 1929 is invoked to justify debtor relief, whereas its preceding long decline elicited no comparable demand for compensation. Explicitly setting aside a verdict on whether abandoning gold was right or wrong, he argues that politically managed money, under a debtor-favoring public opinion, cannot command the confidence once attached to a fixed gold standard.

A lasting restoration consequently requires a change in economic convictions, not merely a new parity:

Only the conviction that the rigid gold standard has great advantages, and that the disastrous violent fluctuations of the purchasing power are not due to the gold standard but to the preceding expansion of credit could make the return to gold final.

Here Mises connects monetary credibility to an explanation of instability centered on prior credit expansion. He closes by challenging Gregory’s apparent confidence that the necessity of renewed world trade and investment is generally accepted. Influential political forces dispute precisely that premise. The review’s enduring relevance lies in its distinction between formal monetary rules and the public commitments that make them credible: technical restoration cannot repair international confidence while interventionist and debtor-favoring objectives retain priority.