Britain’s return to the gold standard in 1925 has become a byword for a self-inflicted economic fiasco. The idea was to seek stability by fixing a price for an ounce of gold on demand – trade and confidence in sterling would flood back and Britain would continue with the roaring 20s, the boom that followed the First World War and the 1918 flu pandemic.
However, the exchange rate was pitched so high that industry, instead of seamlessly adjusting its prices and costs, was devastated. The consequent public austerity, deflation and attempted wage cuts triggered mass unemployment and the General Strike.
But at the time, Conservative opinion was universally for it and the Labour party made no objection. Indeed, Ramsay MacDonald’s short-lived government four years later continued with the policy until it collapsed. The empire, free trade and sound finance demanded no less.
This from the cretin who insisted Britain should join the euro in order to support free trade and sound finances, right?