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BY THE SAME AUTHOR
INDIAN CURRENCY AND FINANCE.
Pp. viii + 263. 1913.
7s. 6d. net.
THE ECONOMIC CONSEQUENCES
OF THE PEACE.
Pp. vii + 279. 1919.
8s. 6d. net.
A TREATISE ON PROBABILITY.
Pp. xi + 466. 1921.
18s. net.
A REVISION OF THE TREATY.
Pp. viii + 223. 1922.
7s. 6d. net.
A TRACT
ON MONETARY REFORM
MACMILLAN AND CO., Limited
LONDON · BOMBAY · CALCUTTA · MADRAS
MELBOURNE
THE MACMILLAN COMPANY
NEW YORK · BOSTON · CHICAGO
DALLAS · SAN FRANCISCO
THE MACMILLAN CO. OF CANADA, Ltd.
TORONTO
A TRACT
ON
MONETARY REFORM
BY
JOHN MAYNARD KEYNES
FELLOW OF KING’S COLLEGE, CAMBRIDGE
MACMILLAN AND CO., LIMITED
ST. MARTIN’S STREET, LONDON
1923
COPYRIGHT
PRINTED IN GREAT BRITAIN
v
PREFACE
We leave Saving to the private investor, and weencourage him to place his savings mainly in titlesto money. We leave the responsibility for settingProduction in motion to the business man, who ismainly influenced by the profits which he expects toaccrue to himself in terms of money. Those whoare not in favour of drastic changes in the existingorganisation of society believe that these arrangements,being in accord with human nature, havegreat advantages. But they cannot work properly ifthe money, which they assume as a stable measuring-rod,is undependable. Unemployment, the precariouslife of the worker, the disappointment of expectation,the sudden loss of savings, the excessive windfallsto individuals, the speculator, the profiteer—all proceed,in large measure, from the instability of thestandard of value.
It is often supposed that the costs of productionare threefold, corresponding to the rewards of labour,enterprise, and accumulation. But there is a fourthcost, namely risk; and the reward of risk-bearing isvione of the heaviest, and perhaps the most avoidable,burden on production. This element of risk is greatlyaggravated by the instability of the standard of value.Currency Reforms, which led to the adoption by thiscountry and the world at large of sound monetaryprinciples, would diminish the wastes of Risk, whichconsume at present too much of our estate.
Nowhere do conservative notions consider themselvesmore in place than in curr