All Commentary
Monday, January 1, 1962

An International Order

Turin—Economists and political scientists from eighteen nations met (Sept. 3 to 9) in this Italian city to discuss some of the world’s political and economic problems.

They are members of e Mont Pelerin Society, named after the place where it first met in Switzerland fourteen years ago. The original meeting was attend d by only 47 persons from little More than half a dozen countries the U. S., Britain, France, Italy, Switzerland, Belgium, Holland, and Norway. Chiefly under the leadership of F. A. Hayek, author of The Road to Serfdom, who be­came the society’s first president, the group was united by a common belief in libertarian principles—in limited government, in free, private, competitive enterprise, in the lowering or abolition of the barriers to international trade, in the restoration of a world mone­tary order, in the restoration of a Rule of Law, internally and ex­ternally. They were against the network of price controls and exchange controls that then existed, against the drift into socialism, collectivism, national planning, and the welfare state, that seemed so irresistible in Europe and so fashionable in the U.S.

The group that met in 1947 felt isolated. Those especially who came from Continental Europe thought of themselves as “lib­erals,” and called themselves that; but their principles—of tradi­tional liberalism—were regarded as reactionary, outmoded, and un­real by their socialist and welfare-statist colleagues in the academic world. For the great majority of those who met were university professors.

Men of Influence

In the following decade, how­ever, the Mont Pelerin Society met with more success than its original members had dared to hope for. Its membership now exceeds 200, from more than twenty countries, including non-European countries such as Japan, India, Argentina, and Peru. And its membership, though still dominantly made up of professors and scholars, in­cludes men who occupy or have oc­cupied positions of great influence or power in their own countries—Sen. Luigi Einaudi, former Presi­dent of Italy, Dr. Ludwig Erhard, Economics Minister of West Ger­many, Jacques Rueff, author of the Rueff economic program in France, Pedro Beltran, the Pre­mier of Peru, to name a few.

The original members of the society have lived to see stifling economic controls, internal and ex­ternal, lifted in a score of coun­tries, currencies stabilized, infla­tions in many countries brought to a comparative halt, and a wide disenchantment with socialist panaceas. Some of the members have been influential in bringing about these reforms. But they have acted always as individuals. The society is in no sense a prop­aganda organization; it has no platform, program, or declared statement of principles. It meets purely for the exchange of ideas, and though it is pervaded by a libertarian philosophy and spirit, there are differences of opinion on details.

Global Topics

At the meeting the members dis­cussed such topics as the relation­ship of democracy and liberalism, the responsibilities of the Western countries to the underdeveloped areas, the status of Communism, particularly in Italy, France, and South America, and the possibility of a return to an international monetary order.

Again, in the shadow of the Berlin crisis and the threats and actions of Khrushchev, many members expressed the deepest misgivings about the outlook for economic order and freedom. Yet there was a surprising area of agreement among the recommen­dations of individual speakers for national and international cur­rency reform. What was remark­able was the almost unanimous conclusion that the only alterna­tive to inflation and continued monetary chaos was a restoration of the international gold standard.

There was, to be sure, some dis­sent from this view. There was even more disagreement among individual speakers concerning the exact method of returning to a full gold standard and of adopting new currency unit values in terms of gold. But not a single speaker expressed satisfaction with the present International Monetary Fund system. Several, indeed, dis­missed it as a pseudo-gold stand­ard, a “gilded” standard with a built-in world inflationary bias.

Newsweek, September 25, 1961

  • Henry Hazlitt (1894-1993) was the great economic journalist of the 20th century. He is the author of Economics in One Lesson among 20 other books. See his complete bibliography. He was chief editorial writer for the New York Times, and wrote weekly for Newsweek. He served in an editorial capacity at The Freeman and was a board member of the Foundation for Economic Education.