International Economic Organisations

THE purpose of permanent organisations in the national as well as in the international sphere is the accomplishment of tasks of a lasting character which cannot be achieved by short term arrangements. In the wider international field political and religious organisations of a permanent character preceded the formation of economic agencies. After the breakdown of mercantilism and the triumph of liberal economy in the nineteenth century a multi lateral network of world trade revealed the existence of a world trading community as its social background. The disintegration of mercantilist economy which gradually found its expression in the writings of Locke, Hume, Adam Smith and others, resulted in the general conviction that an international division of labour would be to the benefit of all civilised nations. The withdrawal of the State from the economic sphere left all economic initiative and activity to the private community. As trade developed across national frontiers without interference of governments, the private business community became a horizontal world stratum whose transactions were governed by a normal market regime.¹ Once habits of united action were evolved all over the world, the need for a mechanism of world economic balance arose and found its solution in the gold standard. A community of Central Banks under the leadership of the Bank of England was in charge of this mechanism. Whereas the world trading community remained as a whole an invisible body, the Central Bankers' team assumed the form of an informal quasi-organisation or a club and deserves therefore a more detailed discussion. Though the mechanism of the gold standard was self-adjusting, the maintenance of world economic equilibrium, a purpose of fundamental importance, called in time for conscious action and thus for initiative in the sphere of organisation or quasi-organisation.