Another advocate of currency unions worth noting: Paul Volcker – in the form of fixed exchange rates – which is to say a global currency union – which requires, of course, far more than the Euro, that elusive goal, an international monetary system that takes into account a multi-polar political world.

Yet another advocate the French economist: Jacques Rueff – contemporary of Keynes and Hayek, architect of de Gaulle’s initiative to reset the one prescribed by Harry Dexter White at Bretton Woods, in contradiction to one proposed by Keynes, as documented by Robert Skidelsky, Keynes’s biographer: “A golden opportunity for monetary reform” – and further documented in a more recent FT column: “Keynesians are complacent about the dollar.” Appreciating the economic fault lines that resulted from the competitive currency devaluations that followed WW I, that contributed then in no small way to WW II, Rueff articulated the benefits of a system rooted in a global market-driven mechanism, instead of a monetary authority.

Mirroring the fault lines which so motivated Rueff in his work, those identified in Raghuram Rajan’s recent book: Fault Lines, its title coining that metaphor – featured in one of these columns: “The Economist as Political Philosopher,” and subsequently the subject of a comment to another: “Now the Real Work Begins.” While they have taken almost 70 years since Bretton Woods to manifest themselves, the fault lines in today’s international economy differ little in substance from those that emerged in the 20 short years following WW I.

Hat’s off to Mundell, in other words, for anticipating the fault lines Rajan has identified, before they became obvious; for supporting and schooling the many colleagues and students cited in this column; and for continuing to this day to articulate the case for a market-driven international monetary system that takes into account the reality of a multi-polar political world. In testimony to that vision, the Union he helped sire might just succeed, thus making the case for other forms of currency union.

links:
http://www.skidelskyr.com/site/article/a-golden-opportunity-for-monetary-reform/

http://www.ft.com/intl/cms/s/0/bb8827d6-856f-11e0-ae32-00144feabdc0.html#axzz1piElqvXO

http://www.economicprincipals.com/issues/2010.07.19/1163.html

http://www.economicprincipals.com/issues/2010.09.05/1172.html/comment-page-1#comment-2181