Chapter subtitle: Want to see Economics? Isn't that coming!

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Yes, what should I do when I go to the American Economic Association?

Our Master Yuan was a little distracted after answering the call, and hastily finished dinner with the three Grand Arcanas.

After sending them away, the freshly baked doctor of economics took a rare break to shut himself up in his study, lit his beloved Cuban cigar, and remembered the big thing of pretending.

The reason why economics has become the most prominent discipline of the 20th century is that human economic activities have become so complex that they have to rely on specialized theories to guide them.

The reason why the 20th century was so chaotic was that economic theory could not keep up with the international economic development situation.

In fact, this is the normal state of human civilization, and human beings have to cross the river by feeling the stones after all, because there is no traverser with hindsight in this world.

In this respect, there is a significant difference between the natural sciences and the humanities.

After the natural sciences are "figured", all you need to do is pick up a pen and paper to calculate the orbits of the planets, or climb to the top of the tower and throw two iron balls one large and one small below, or catch a bunch of fruit flies to breed and play.

After the humanities "come up", once they start experimenting, they will at least bankrupt a political entity, and at worst turn the whole world into a sea of corpses and blood.

From this point of view, Yuan Yanqian, who is familiar with the history of Western economics and world history, is really "afraid". You must know that the history he reads is written by all mankind with white bones as pen and blood as ink.

For a time-traveler like him, making money or not making money is simply a small CASE that is not even a CASE. Doing things or not doing things is the big CASE he cares about.

And the twenties of the twentieth century is a very critical point in time, and it is a very critical time for economists.

If our Master Yuan had worn it ten years earlier, the First World War would have been on the way and had to be sent.

The Franco-German contradiction over hegemony in Western and Central Europe, the Russian-Austrian contradiction over the Balkan Peninsula, and the Anglo-German contradiction over whether or not the balance of power in Europe could be maintained, the three major contradictions that triggered World War I could not be eliminated by simple economic means.

Even if he had dragon slaying skills, he couldn't perform them. Of course, he wouldn't be a Seris to take care of Oro's Abba, and Euro wasn't really his Abba.

If he had worn ten years late, it would have been too late to prevent the outbreak of the Great Depression, and then all the major countries of the world would have had to take care of themselves.

The Second World War was practically inevitable. Of course, he, a Serisian, had no choice but to find a way to help the Communist Party.

1921 was different, and for nearly seven or eight years he had both ways to weaken the effects of the Great Depression and to strengthen its power.

If the former goal is achieved, it is not known whether there will be World War II. Because the patients with the second disease who "I like war" are a minority after all.

If the latter goal is achieved, it is not known whether there will be World War II. Because old Europe may not wait for World War II to be completely red.

Returning to the previous question, Yuan Yanqian naturally wants to talk about the issues that the current economic community is most concerned about.

So apart from the dispute between the capital and the society, what other problems can make him pretend to be a big force?

Three words, the gold standard!

In fact, from an economic point of view, the most profound impact of the First World War on human history was the first collapse of the gold standard.

Note that the "gold standard" does not refer only to a country's monetary system, but to an international monetary settlement system that was formed in 1880 and lasted from 1913.

During this period, the capitalist powers of Great Britain, the United States, Germany, the Netherlands, some of the Nordic countries, and the Latin Monetary Union (consisting of France, Italy, Belgium, and Switzerland) all applied the purest form of the gold standard, the gold coin standard, which provided the basis for the smooth conduct of international trade.

The gold standard is based on gold as the only reserve, and only gold has unlimited solvency. "Bank bills (banknotes) in the true sense of the word" issued by central banks and private banks, including silver, copper and other metallic or non-metallic coins, can be freely exchanged for gold without restrictions.

In the heyday of the gold standard, gold was the most important international reserve asset for all countries. The pound sterling is the most important means of international settlement, and gold and the pound have become recognized international reserves by all countries at the same time.

The reason why the pound is so awesome is because Niu Niu was so awesome at that time. As a result, an international gold standard centered on gold and the British pound was formed, also known as the Sterling Exchange Standard System.

Then World War I broke out, and various countries, including the Empire on which the sun never sets, stopped exchanging bank bills for gold and banned the export of gold.

During the war, countries implemented a free-floating exchange rate system, exchange rates fluctuated wildly, and the stability of the international monetary system no longer existed. Thus the gold standard came to an end.

So after the First World War, a question arose, without the international monetary settlement system, how would countries do business with each other?

Well, in fact, it is still a small problem that everyone cannot do business, and if you don't do it, then don't do it, just in accordance with the tradition of mercantilism, you can build non-tariff barriers, so as to protect the industry and agriculture of various countries.

That is why the United States plunged into a "Little Depression" from 1920 to 1921.

However, after the loss of gold as a "monetary anchor", inflation in various countries will inevitably intensify. That's a big problem. Inflation can lead to a red revolution.

The inflation of currencies in various countries is linked to the German-Austrian war reparations, and the problem is not only bigger but also more complicated.

After talking for a long time, I talked about two major practical problems faced by economists around the world in 1921:

First, the gold standard system should be re-established.

Second, sort out the war reparations of the Allies.

There is also a small problem attached to these two major problems, since it cannot defeat Soviet Russia, then it is simply necessary to drag Soviet Russia back to the capitalist international system.

Whether it's Mises or Keynes, a large number of economists in Europe are now busy with these few things.

Compared with these few things, the controversy is nothing more than an academic dispute.

So in 1922 there were two important economic conferences, one was the Genoa Conference in Italy in the spring, and the other was the Geneva Conference in Switzerland in the fall.

The Genoa Conference was a condition for the countries to recognize Soviet Russia and pressure Soviet Russia to recognize the foreign debts owed by Tsarist Russia before. As a result, Maozi and Hans recognized each other on the sidelines, forgave each other's foreign debts, and entered the Sood-German honeymoon period.

The Geneva meeting was a meeting of central banks to re-establish the gold standard, and as a result, the current predicament was alleviated and the seeds of a future Great Depression were planted.

So does our Master Yuan have a way to solve these problems?

Yes, yes, it's all written in the history books, and it's a one-and-done practice......

"Pickup Pickup Pickup Pickup ......"

"The master ball is done. The alias is lost! Wouldn't it be nice if I pushed history in the 'right direction'? ”

"Host, you must be correct, if it is not correct, the system has to come to a real 100,000 volts."