By the middle of the nineteenth century, with the establishment of the gold standard and the institutionalization of financial orthodoxy that emerged with it, capitalist class relations between owners and workers became more entrenched, and any scenario for redistributive demands in favor of the people was eff ectively blocked. Th e gold standard required states to secure a certain amount of gold in their coffers so as to be able to make good on their promise to convert the currency into gold at a fixed price. Hence, states' priority was to avoid the outflow of gold, a priority that implied tight fi scal and monetary policies. Running a trade surplus was the surest way to build up a country's gold reserves. Conversely, trade defi cits led to an outfl ow of gold, since countries used gold to pay for their imports. Any extra public expenditure, or any easing of credit— the bases for redistributive policies— would result in gold fl ights and were therefore nonstarters. … A tight fi scal budget, on the other hand, could bolster trade surpluses by lowering domestic demand. And higher rates of interest (which promised higher returns on capital while deterring imports as they slowed the domestic economy) would draw gold bullion back into the country. Hence, the imperative of fi scal and monetary rigor was normalized.

Clara E. Mattei, The Capital Order, loc. 102