Denationalisation of Money: The Argument Refined by F. A. Hayek

Author:F. A. Hayek [F. A. Hayek]
Language: eng
Format: epub, pdf
ISBN: 978-1-61016-141-1
Publisher: The Institute of Economic Affairs
Published: 1990-11-06T16:00:00+00:00

Wholesale commodity prices as standard of value for currencies over international regions

My expectation would be that, at least for large regions much exceeding present national territories, people would agree on a standard set of wholesale prices of commodities to treat as the standard of value in which they would prefer to have their currencies kept constant. A few banks that had established wide circulation by accommodating this preference, and issued currencies of different denominations but with roughly constant rates of exchange with one another, might continue to try and refine the precise composition of the standard ‘basket’ of commodities whose price they tried to keep constant in their currency.1 But this practice would not cause substantial fluctuations in the relative values of the chief currencies circulating in the region. Regions with different compositions of the currencies in circulation would, of course, overlap, and currencies whose value was based chiefly on commodities important for one way of life, or for one group of predominant industries, might fluctuate relatively more against others but yet retain their distinct clientele among people with particular occupations and habits.

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