International Adjustment in the Heyday of the Gold Standard

The British monetary debates in the first half of the nineteenth centurygreatly influenced and shaped the monetary doctrines of two outstandingclassical writers - Karl Marx and John Stuart Mill. Theformer launched the well-known radical critique of classical politicaleconomy, whereas Mill became the recognised exponent of thecanonical model of classical economics; yet on international monetarymatters there was a remarkable similarity of views between the twothinkers - at any rate, at the superficial or practical level.Marx on International MoneyKarl Marx’s views on monetary matters were influenced by his readingof the monetary arguments leading up to Peel’s Act. He commented agreat deal on the monetary theories of his contemporaries, and it is ofsome interest to take note of where he stood on these matters. As is wellknown, Marx was an unswerving defender of the gold standard, but atthe same time an implacable opponent of the Quantity Theory ofMoney which supposedly provided the rationale for the automaticworking of the former. Marx himself revealed that it was the economicchanges brought about by the Californian and Australian golddiscoveries which first led him to a serious study of the nature anddynamics of bourgeois political economy:The enormous material on the history of political economy which isaccumulated in the British Museum; the favourable view whichLondon offers for the observation of bourgeois society; finally, thenew stage of development upon which the latter seemed to haveentered with the discovery of gold in California and Australia.