Polanyi's thesis

Karl Polanyi's thesis, or "Polanyian" approaches to understanding why Great Britain shifted away from the gold standard. This was a significant shift in the sense that Great Britain was the bulwark of gold standard and it was the first to exit it - demonstrating that flexible exchange rates were indeed more feasible in sustaining recovery after big financial crises. Polanyi, to solve this significant and surprising shift, defends that interests and institutions are in play here. Gold standard sacrifices monetary policy autonomy, which is preferred by the working class, and gold standard is preferred by the wealthy who prefer a stable exchange rates. Given these, before the war, the working class wasn't empowered, but they became empowered after the war - which introduced a passage into the flexible exchange regime.

Yet, there are problems with this thesis - mainly the fact that the protection of the gold standard ideal has been the top priority of every policymaker in the treasury, the government, or the Bank of England, which already was very independent. Given these, surely something other than interests or institutions explains this shift, and that missing variable in this thesis is the glorious John Maynard Keynes, whose ideas still should be on the top of the policymakers' heads as they are trying to move out their countries out of recession.