An International Monetary System

Abstract

To speak of an ‘international monetary system’ is illusory. It implies a mechanism of interrelated parts, functioning for some clearly defined end, according to known laws. It implies knowledge, certainty and predictability. All these attributes the international monetary system possesses but in a varying degree. To describe it as a system is an over-simplification, permissible only in the interests of economic analysis. When moving from the precise formulations and general prescriptions of economic theory to the real world of policy it is necessary to remember that we leave the realm of system and precision for a world of approximation which operates not by law but by tendency.