Austrian school economists converted from gold standard to floating rates

Evidence

By the mid-1950s, advocates of floating seem to have won over the two “American Austrians,” Gottfried Haberler and Fritz Machlup, both former students of von Mises and advocates of the gold standard who became key protagonists in the neoliberal crusade for floating exchange rates. They were joined by others from the German tradition of the Freiburg school of ordoliberalism, including Friedrich Lutz and Fritz Meyer. At the discussions within the MPS, however, the position remained unpopular. As reported from the 1957 meeting in St. Moritz, “the advocates of flexible exchange rates [were a] minority” and were “accused of monetary nationalism by Prof. Heilperin.” — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 431

Categorization

• XREF: Connects to the reader’s austerity/neoliberalism map — the Austrian-to-floating conversion fractures the ‘gold standard = Austrian identity’ caricature. Also connects to Austrian School literature already read. — connects to: A fringe economist’s idea for flexible exchange rates went mainstream within two decades — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 440; Early neoliberals favored the gold standard and opposed floating rates — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 428; Friedman converted to floating rates from the gold standard position — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 429 (+1 more)
• QUESTION: Austrian free-banking theory (e.g., Hayek’s denationalization of money) coexists awkwardly with floating-rate advocacy — worth chasing how these currents reconciled.

Broader Connections

• Real-world inflation events converted MPS economists to floating rates #corroborates (0.86) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 432