The way in which advocates of floating exchanges pursue their crusade by trying to make us believe that black is white and vice versa compels reluctant admiration. They actually profess to believe that the system of their choice is a preferable alternative to economic nationalism which, according to them, would arise as surely as night follows day as a result of the maintenance of fixed parities. This contention is in flagrant conflict with generally known facts of recent history. There may be some excuse for the younger generation to ignore the experience of floating exchanges in the ’30s which were accompanied by an increase of economic nationalism in the form of protectionism and exchange control. But the older generation of economists, and students of all ages concerned with inter-war economic history, cannot plead ignorance.
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