Genesis and Exodus

Abstract

This chapter provides an overview of the tragedy of England's return to gold. In the spring of 1925, Winston Churchill settled upon a plan to make Britain great again: he would restore the gold standard. This was Churchill's first significant policy initiative since becoming the Chancellor of the Exchequer in the new Conservative government. However, in the wake of the First World War, Parliament extended the UK's wartime capital controls. This created an opportunity for the revered economist John Maynard Keynes to wage an aggressive, highly visible campaign against this very course of action. The book argues that the UK's particular path back onto gold in the 1920s followed directly, although not inevitably, from a combination of three things: a zealous and widespread faith in “orthodox” political economy; the reality that such beliefs were less an “orthodoxy” than a mythology; and the theocracy to which this gave rise.