Churchill’s 1925 return to gold at a high rate devastated British exports and unemployment

Evidence

The British elite’s rather monolithic view began to splinter in 1925 when Keynes criticized Churchill’s decision to go back on the gold standard after an eleven-year hiatus. Churchill put Britain back on at a high exchange rate, which, though it was good for the City of London and for foreigners holding sterling, was terrible for British exports. As a consequence, unemployment, already bad, shot up, and economic activity declined. Keynes had predicted that this would occur, and indeed it did, much to the chagrin of Churchill and the Treasury. — Mark Blyth, Austerity, 332

Categorization

• XREF: The 1925 gold-standard decision is a standard Austerity-era touchstone connecting to broader interwar monetary history. — connects to: Gold-standard return caused depressions across Britain, Japan, and France — Mark Blyth, Austerity: The History of a Dangerous…, 557; Returning to gold required deliberate deflation in post-WWI Europe. — Mark Blyth, Austerity: The History of a Dangerous…, 499; Pound revaluation in the 1920s forced down wages through mass unemployment — Clara E. Mattei, The Capital Order: How Economists…, 1683
• CANDY: A crisp illustrative fact: returning to gold at a high rate served the City and foreign sterling-holders but crushed exports.

Broader Connections

• Pound revaluation in the 1920s forced down wages through mass unemployment #corroborates (0.85) — Clara E. Mattei, The Capital Order, 1683
• Returning to gold required deliberate deflation in post-WWI Europe. #qualifies (0.75) — Mark Blyth, Austerity, 499