THE MONETARY SIN OF THE WEST

A best-seller in Europe and likely to flourish here too, this book reproduces the major essays of the past decade by a venerable French economist. ""Some will no doubt be surprised that in 1961, practically alone in the world, I had the audacity to call attention to the dangers inherent in the international monetary system as it existed then."" His thesis, past and present: the reserve currency system based on gold exchange (the pound after World War I, the dollar since World War II) has led to massive accumulations of reserve currency in creditor nations which in turn use these accumulations as the basis for currency expansion, causing worldwide inflation. Rueff claims that this trick of paper reproducing itself, or inflationary double-counting, could bring on a 1931-type depression. His solution, which he feels may be already precluded, is to double the price of gold, putting gold behind America's dollar debts and incidentally yielding a whopping windfall to the French treasury. Inasmuch as Rueff's excoriation of the ""Anglo-Saxon"" reserve system fitted nicely into Gaullist aims, he became a top advisor to the General and here reproduces a memo to him as well as a speech by De Gaulle based on it. Other articles appeared in Le Figaro, Le Monde, and Fortune; there also is an Economist interview and a discussion with Robert Triffin of Yale. The 1968 monetary crisis led Rueff to conclude that a system ""convertible as long as you don't convert"" means the end of the gold standard, i.e., the absolute need to follow his own prescriptions. Rueff's consistent and forthright championship of his own theory stands in contrast to the timid eclecticism and craven bedside manner of much of the professional economic writing this side of the Atlantic.