Skip to main content

9902220346f86f680e38be05_pa3667c.jpg

The Irrepressible 1930’s

The just concluded G-20 meeting in Seoul broke up without agreement on either currencies or trade. Despite global leaders’ vows to the contrary, it seems that the dreadful protectionist precedent of the 1930’s is about to be revived.

LONDON – The just concluded G-20 meeting in Seoul broke up without agreement on either currencies or trade. China and the United States accused each other of deliberately manipulating their currencies to get a trade advantage. The Doha Round of global trade talks remain stalled. And, amid talk of the “risks” of new currency and trade wars, such wars have already begun.

Thus, despite global leaders’ vows to the contrary, it seems that the dreadful protectionist precedent of the 1930’s is about to be revived. That decade’s trade war was started by the US with the Smoot-Hawley tariff of 1930. The British retaliated with the Import Duties Act of 1932, followed by Imperial Preference. Soon, the world economy was a thicket of trade barriers.

Britain fired the first shot in the 1930’s currency war, leaving the gold standard in September 1931. The US retaliated by leaving the gold standard in April 1933. The pound fell against the dollar, then the dollar against the pound.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/kKCOX3q;
  1. solana109_robert wallisCorbis via Getty Images_manhittingberlinwall Robert Wallis/Corbis via Getty Images

    The Partial Triumph of 1989

    Javier Solana

    The fall of the Berlin Wall in November 1989 marked the end not of a historical chapter, but of a paragraph. Although capitalism currently has no rival, it has proven its compatibility with illiberal forces.

    0
  2. sachs315_Pablo Rojas MadariagaNurPhoto via Getty Images_chileprotestmanbulletface Pablo Rojas Madariaga/NurPhoto via Getty Images

    Why Rich Cities Rebel

    Jeffrey D. Sachs

    Having lost touch with public sentiment, officials in Paris, Hong Kong, and Santiago failed to anticipate that a seemingly modest policy action (a fuel-tax increase, an extradition bill, and higher metro prices, respectively) would trigger a massive social explosion.

    1

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions