Dumb Networks and Smart Capital

Wriston, Walter B.


A Sea Change in the Global Monetary System


The development of the global market I have sketched was occurring contemporaneously with a sea change in the world's monetary system. For the first time in history, no major currency is tied directly to a commodity like gold or silver. In 1911, long before the advent of information technology, Irving Fisher opined that "irredeemable paper money has almost invariably proved a curse to the country employing it" [5] . He certainly had history on his side. The advent of the Gold Standard and the Gold Exchange Standard furnished for a time a discipline on the creation of money, but now with the uncoupling of money from any commodity, those old arrangements have been replaced by an even more draconian device which I call the Information Standard. This new discipline is being administered by a completely new system of international finance.


[5] Fisher, I. (1911) The Purchasing Power of Money. New York: Macmillan: 131