The Myth of the Monetary Belle Époque

The gist of Money and Empire by Marcello de Cecco consists in showing how discretional policy decisions, rather than automatic adjustment operating through the price-specie-flow mechanism, guaranteed the orderly functioning of the Gold Standard. The decades before WWI, often regarded as the heyday of the Gold Standard, were in fact the years of its decline. The paper argues that, in addition to its important contribution to the reconstruction of the actual functioning of the Gold Standard, Money and Empire prompts two reflections. The first is on the general argument of the book that all monetary systems must be studied by looking at the power relations underlying them, money being a social construct. The second concerns the use made by de Cecco of both economic facts and economic theories and his reconstruction of their reciprocal influence. Re-reading Money and Empire invites thus to reflect on the complex relations between economic theory, economic history and the history of economic ideas, fields where de Cecco moved at ease.