Review by Judy Shelton
This is indeed a red-letter day for RP’s Diary.
A grand review of the book has been published in a prestigious US journal. It states that
The Money Trap “provides a superb explanation of how we got into this mess”
– and a way out
and “what we need to understand in order to properly evaluate various potential approaches to finding our way out”.
“Herein lies the essential value of Pringle’s book. He dares to explore potential ways to escape ‘the money trap’’ – to transcend monetary nationalism in favour of building a truly international monetary order based on a common standard of value.”
These are but two of the highlights of a grand review published in the Cato Journal (Fall, 2012 issue). The author, Judy Shelton, is a Fellow of the Atlas Economic Research Foundation, and a noted economist, author, monetary reformer and regular contributor to the Wall Street Journal. The Cato Institute is America’s leading free-market think tank.
I can’t resist quoting further:
The Money Trap, says Shelton, “brings to the debate on the causes of the financial crisis the notion that the global exchange rate regime matters; we cannot ignore the damaging impact of chaotic exchange rates among leading currencies if we are to identify what brought on the financial meltdown”.
“In Pringle’s view, it makes no sense to separate the topic of monetary reform from an analysis of banking, finance and financial markets”.
“He considers it a grave sin of omission that a whole generation of economists has failed to build an environment of rules-based monetary relations….”
Central banks have been complicit in this dereliction of duty.
“Pringle has given us a beautiful statement of purpose juxtaposed against a background of current failings”
– a service to mankind!
“Pringle’s careful analysis and assiduous tracing of events leading to the crisis provide the reader with a template for evaluating potential paths to meaningful international monetary reform.”
“In this, he has done a service to mankind ..”
Only an author who has spent years working on a manuscript and awaits with trepidation the response of readers can know the sheer relief and joy that comes with the knowledge that he has successfully communicated with at least one of them. One person has entered into the spirit of the work and grasped its arguments. When that person is somebody of the standing of Shelton, and when it is published in such a prestigious publication as the Cato Journal, that is indeed icing on the cake.
I know full well, and Shelton knows even better than I, what an uphill task monetary reformers face on both sides of the Atlantic. We are fighting real as well as ideological vested interests of all sorts. It reminds me of the campaign to establish a decent monetary policy in the face of the crazy “growth merchants” of the 1970s, people who presided over the most inflationary decade in the history of the global economy. That period had to be brought to an end. So now, again, money mismanagement is wrecking our world.
The convictions that Shelton, Robert Mundell and other monetary reformers share will, I trust and believe, gradually win wider acceptance.
What we need is to put in place a wholly voluntary international monetary standard:
The key step is for major governments to agree not on a common currency but on a common monetary unit of account in which citizens can have confidence. Further steps would be needed to realize the potential of such a reform. But it would open up the prospect of bringing the public good of international monetary stability back to the world economy for the first time in 100 years.
For the Cato Journal review, click here.