The tumultuous period between the two World Wars was a crucible for monetary theory and policy. The collapse of the pre-war gold standard, its subsequent reconstruction in the 1920s, and its swift demise in the early 1930s forced economists and policymakers to fundamentally re-examine the structure of international economic relations. In his seminal 1939 work, International Monetary Economics, Michael A. Heilperin argued that the core of these debates was not merely a technical dispute over competing systems, such as the gold standard versus managed currencies. Rather, it was a profound ideological conflict between two opposing philosophies: Monetary Internationalism and Monetary Nationalism.

Heilperin contended that the failure of the inter-war monetary order stemmed largely from erroneous conceptions and a failure to grasp that any international system, regardless of its technical design, rests on a foundation of coordinated national policies. The central conflict was one of policy intent: should nations coordinate their domestic monetary policies to ensure international stability, or should they prioritize purely national objectives, allowing international relations to bear the cost? Understanding this historical schism is not merely an academic exercise; it provides a vital framework for analyzing the persistent challenges of global economic governance, from currency wars and competitive devaluations to the ongoing debate between floating and fixed exchange rate regimes.

This analysis synthesizes Heilperin’s 1939 critique. It begins by establishing his precise definitions of the core ideological concepts that framed the debate. It then examines his deconstruction of monetary orthodoxy, particularly concerning the role of gold, and critiques the influential quantitative theories of the era. Finally, it outlines Heilperin’s own theory of international payments and equilibrium, culminating in his universal principle: that the essential mechanism of monetary adjustment is the same for all systems, making the ultimate choice one between coordinated stability and nationalist-driven chaos.