The gold standard—the liberal economic order that shaped the first phase of globalization between 1871 and 1914, lasted until the outbreak of the First World War, and was resuscitated in the interwar period—was fundamentally anti-democratic. To enable free international capital flows at an astonishingly high level—around 1900 at a similar level to the year 1990 in proportional terms—this system of fixed exchange rates and gold backing posed strict limits to domestic economic policies. Karl Polanyi has given a moving description of what this meant for working people and the poor: if the balance of payments, volatile international capital markets, and the stabilization of exchange rates demanded domestic restraint, then high unemployment and falling wages were condoned. As stated in a standard textbook, the "stability of exchange rates relied on the submission of national economic policies under the diktat of balance of payments adjustment."

Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, loc. 414