Yasuo Gonjo’s The Truth of Liberal Economy, translated by Kazuhiko Yago, retraces the critical dialogue between Jacques Rueff and John Maynard Keynes from the interwar period through the major economic and monetary reforms of the twentieth century. At the same time, it sheds light on debates surrounding inflation, interest rates, unemployment insurance, monetary regimes, the role of central banks, the functioning of international institutions, and adjustment mechanisms, as well as the controversies surrounding the construction of Europe and its subsequent transformations. These issues, far from belonging to the past, remain central to contemporary economic debates.

After sketching a portrait of Jacques Rueff in the opening chapter, Gonjo develops in the first part of the book an analysis of the economic, social, and political challenges of the interwar and post–Second World War periods, systematically contrasting the positions of Keynes and Rueff. More specifically, this first section—comprising eight chapters—highlights two fundamentally opposed conceptions of the economy: on the one hand, Keynes’s view, centered on demand insufficiency and the need for institutional adjustments; and on the other, Rueff’s perspective, grounded in monetary discipline, convertibility, and spontaneous adjustment mechanisms. Taken together, the analysis shows how these theoretical divergences helped shape the major economic orientations of the twentieth century, particularly in debates surrounding the gold standard, the dollar, inflation, and international stability.

The book first revisits the First World War and the Treaty of Versailles, a pivotal moment in economic history. While Keynes, in The Economic Consequences of the Peace (Reference Keynes1919), denounces the severity of the treaty and its potentially destabilizing effects, Rueff emphasizes fiscal responsibility and balance of payments. The first part continues with a central chapter devoted to the issue of persistent unemployment in the United Kingdom. Rueff interprets it as the result of distortions induced by the unemployment insurance system, which would obscure market signals, whereas Keynes views it as a manifestation of insufficient aggregate demand, and thus of a macroeconomic imbalance requiring corrective state intervention. These positions reflect two fundamentally divergent conceptions. For Rueff, the imbalance arises from a price rigidities mechanism that keeps prices above equilibrium; for Keynes, it stems from a lack of public intervention to correct market imbalances.

The book also addresses, in the following two chapters, the controversy over German reparations as well as international monetary debates concerning the gold standard, the Great Depression of the 1930s, and the Gold Conference. Indeed, invited to Geneva in 1928, Rueff and Keynes clashed over adjustment mechanisms. For Rueff, faithful to classical theory, balance of payments imbalances adjust automatically through prices: Gold outflows reduce domestic purchasing power, thereby correcting the trade balance. Drawing on statistical examples, notably France’s postwar adjustment, he concludes that the “transfer problem” does not exist; what truly matters is Germany’s political capacity to bear higher taxes. Keynes, by contrast, argues that real adjustment would be extremely difficult; lowering wages to increase German competitiveness would provoke unemployment, social tensions, and a deterioration in the terms of trade. He maintains that a “natural” level of exports limits adjustment capacity and that price-based adjustment would be politically and socially untenable, as it would entail wage reductions, unemployment, and worsening trade terms. This controversy highlights a profound disagreement between a classical-liberal approach (Rueff) and a more pragmatic, interventionist approach (Keynes), foreshadowing the later opposition between neoliberalism and Keynesianism.

Regarding monetary debates and the return to the gold standard, Rueff defended orthodox positions, advocating a strict gold standard based on the automatic adjustments of balance of payments, fiscal discipline, and exchange rate stability, considering monetary stability a prerequisite for a healthy economy. By contrast, Keynes argued in favor of a monetary regime more flexible: Central banks should be able to intervene in the money supply to stabilize prices, support employment, and promote exports, even if this undermines the automatic adjustment mechanisms inherent in the gold standard. That said, Gonjo ought to have referred to The Economic Consequences of Mr. Churchill (Reference Keynes1925), a key text for understanding Keynes’s critique of the restoration of the gold standard—especially at its prewar parity. More broadly, the analysis helps to clarify their contrasting perspectives. For Rueff, the gold standard remained an effective long-term mechanism of coordination; for Keynes, it represented an obstacle to immediate economic recovery. Furthermore, Rueff emphasized rigor and automatic adjustment, whereas Keynes favored adaptability and active regulation. Their respective approaches illustrate the tension between monetary discipline and interventionist economic policy in the interwar period. These divergences become even more explicit in the following chapter, where Gonjo examines Rueff’s critique of Keynes’s General Theory (1936). Rueff accuses Keynes of confusing the causes and symptoms of unemployment and of justifying state intervention at the expense of market mechanisms.

The last two chapters of the first part of the book address the intellectual and political legacy of these debates. They focus on the postwar period, characterized by the dominance of Keynesianism in Western economic policy, while also highlighting the gradual resurgence of liberal ideas, championed by figures such as Rueff. Close to Charles de Gaulle, Rueff advocated the restoration of monetary convertibility and fiscal discipline, opposing inflationary tendencies. He warned against the pitfalls of the dollar-based international monetary system, which he considered inherently unstable. These analyses of liquidity shortages and the coordination of economic policies foreshadow the debates of the 1970s surrounding the collapse of the Bretton Woods system. Beyond Rueff’s positions, Gonjo thus highlights the paradoxical complementarity between Keynes and Rueff: One promotes state intervention to support the economy, while the other reminds us of the risks of financial irresponsibility and monetary imbalances. More broadly, the works of Rueff and Keynes delineate the lines of tension that continue to shape contemporary economic policy.

Gonjo (p. 72) paradoxically concludes the first part of his book by highlighting that, in his final posthumous article published in The Economic Journal (Keynes Reference Keynes1983), Keynes warned against a hasty rejection of classical theory. He emphasized that it contains “eternal truths,” such as the “forces of nature” or the “invisible hand,” which always work toward restoring equilibrium. Rejecting these principles, he cautioned, would lead to artificial solutions incapable of achieving genuine balance. This reminder aptly underscores that Keynesian theory was neither meant to replace nor fundamentally oppose classical mechanisms. Rueff, in his writings from the late 1960s, draws on this article to demonstrate that his positions were not as irreconcilable with Keynes as often assumed (Rueff Reference Rueff1977, p. 292), and reveals an unexpected point of convergence between the two authors. In doing so, the book provides a clear and nuanced reading of the intellectual relationship between Keynes and Rueff.

The numerous anecdotes scattered throughout this first part considerably enrich the book. They anchor theoretical debates in concrete historical situations and testify to the rigor and comprehensiveness of Gonjo’s research. They also highlight the extent of Rueff’s network and influence, whose prestigious contacts in both French and American spheres of power demonstrate the international reach of his economic and monetary interventions (p. 54). Furthermore, the author brings to light a discovery overlooked in the history of economic thought: In his correspondence with Rueff, Keynes had not yet fully grasped the concept of aggregate demand—which he would fully integrate only in A Treatise on Money (Reference Keynes1930) and then in the General Theory (Reference Keynes1936)—whereas Rueff had already developed it as early as 1927 in his Theory of Monetary Phenomena (p. 24).

Moreover, this first part of the book is situated within a twenty-first-century historiography that has often paid limited attention to Rueff,Footnote ¹ largely overshadowed by Keynesian hegemony. In the anglophone literature, for example, the controversy over German reparations is generally reduced to the Keynes/Ohlin debate (p. 28), thereby neglecting Rueff’s central role. According to Gonjo, this marginalization can be largely explained by Rueff’s methodology, for whom a theory is valuable only if rigorously confirmed by empirical evidence (Rueff Reference Rueff1922). His approach, grounded in meticulous empirical analysis, has at times been perceived as “non-theoretical” within an academic environment that privileged abstract formalization. This disconnect helps explain why his contribution, despite its fundamental significance, was not fully recognized in the international debate. Yet, Rueff’s arguments —even if debated depending on ideological perspectives—deserve serious consideration, for both their rigor and their concrete impact on economic policy. By rehabilitating Rueff and placing him on an equal footing with Keynes, Gonjo rebalances the reading of economic history and highlights the importance of Rueff’s thought in twentieth-century economic debates, the echoes of which are still felt today.

Furthermore, Gonjo rightly emphasizes in this first section that portraying Rueff simply as a liberal—or even as a neoliberal—constitutes an oversimplification that deeply distorts his thought, which is far more nuanced. As I (Daou Reference Daou2019a) have previously noted, the humanistic and pragmatic dimension of Rueff occupies a central place in his analysis of individual freedom, a point that Gonjo also confirms. Rueff indeed acknowledges that the market can produce social effects requiring state intervention, and his opposition to a dirigiste economy stems less from liberal dogmatism than from a concern to preserve human freedom. His economic and monetary proposals must be understood in this perspective. Far from advocating limitless liberalism, he primarily seeks to prevent the establishment of systems that could curtail individual liberty. This thesis lies at the heart of his magnum opus, L’ordre social (Reference Rueff1945), which Gonjo draws upon in the second part of his book, underscoring that Rueff’s economic analysis remains inseparable from his social and human concerns.

More specifically, the second part of the book, comprising four chapters, focuses almost exclusively on Rueff and aims to show how, from the 1930s onward, liberalism was profoundly rethought, giving rise to neoliberalism. It begins with an analysis of the Lippmann symposium in Paris in 1938, identified as a foundational moment in this redefinition, illustrating how the participants sought to reconcile market mechanisms with certain forms of state intervention compatible with the price system. Intellectuals such as Rueff, Wilhelm Röpke, Alexander Rüstow, and Friedrich von Hayek advocated a renewed liberalism, aiming to combine economic efficiency with institutional oversight. These reflections continued after 1945 with the Mont Pelerin Society, which structured a transnational network of liberal thinkers seeking to reaffirm the legitimacy of the market in the face of the expansion of the welfare state and the hegemony of Keynesianism.

Gonjo then presents Rueff’s conception of “social order,” based on a rigorous critique of inflation and the distinction between “true rights,” which protect economic and social order, from “false rights,” which can be manipulated for financial purposes and threaten stability. In L’ordre social , Rueff’s analysis constitutes a veritable economic sociology of anti-inflation, where rigor in the exercise of rights and the limitation of state financial manipulations are intrinsically linked to social order. Financial claims, particularly those issued by the state to finance public deficits, provide a concrete example of such manipulation, illustrating how certain economic instruments, if not strictly regulated, can destabilize social and economic equilibrium. Rueff’s approach thus goes beyond the mere logic of wealth to incorporate moral and institutional dimensions, considering that the “[e]conomics is like a little outgrowth of the legal system that enforces social peace…. Economics is half-embedded in the legal system, so to speak, and cannot be said to be an independent science” (quoted on p. 91). Thus, economic stability depends as much on the respect of legitimate rights as on market mechanisms, the two being inseparable.

This section also highlights Rueff’s decisive role in the European integration process, particularly in promoting an institutional market structured around competition and monetary discipline. Until now, no study had fully devoted itself to this role; existing works were limited to a few passing mentions (Daou Reference Daou2025b; Carret Reference Carret2023; Cohen Reference Cohen2013). Gonjo’s book thus fills an important gap in the historiography and goes further by offering an original perspective on the functioning of European institutions through the lens of economic theory and thought—an angle rarely explored, even within the abundant literature on the European Community and the common market. In this context, the chapter dedicated to this issue proves particularly valuable. Gonjo performs a remarkable intellectual genealogy, showing how the vision of a “European Union” promoted by Aristide Briand’s cabinet and Alexis Léger’s memorandum drew on Rueff’s ideas. The analysis gains in significance by highlighting the incompatibility between Keynesian theory and the foundations of the common market. It would, however, have been interesting to mention Rueff’s (Reference Rueff1957) paper “Une proposition de marché commun vieille de vingt-quatre ans,” which would have enriched the argument. Similarly, an analysis of his role as a judge could have better illuminated the link between his economic liberalism and his positions on competition. Overall, the book’s ambition is commendable, and the analysis well supported, though specialists of Rueff may find it somewhat lacking.

Rueff’s writings were partially put into practice through the Pinay–Rueff Plans (1958) and Rueff–Armand Plan (1959), tasked with proposing structural reforms: wage deindexation, simplification of the tax system, and the promotion of competitiveness and industrial modernization. Rueff also envisaged reforms to the credit system, but no governmental committee was established to implement his proposals. While Gonjo does not mention them, the role of Wilfrid Baumgartner, the “preserve” he represented in monetary policy and Treasury management, and the rivalry between the two men undoubtedly limited the realization of Rueff’s vision. These elements underscore that the success of economic reforms depends not only on the ideas themselves but also on the balance of power and institutional dynamics within which they are situated.

The Truth of Liberal Economy goes beyond a simple comparison between two historical figures in economics: Rueff and Keynes. By tracing their debates and respective legacies, the book demonstrates that the tension between intervention and discipline, state and market, continues to structure contemporary economic thought. Rueff’s and Keynes’s thought are not merely two opposing doctrines; they embody different approaches to responding to crises in capitalism. Furthermore, the dual perspective, both historical and theoretical, allows for a deeper understanding of the persistence of current debates on debt, inflation, regulation, and collective responsibility. All in all, the book represents an invaluable contribution for specialists of Rueff, though perhaps less so for proponents of Keynes. Indeed, the second part devotes very little space to Keynes, whose presence there appears almost anecdotal. This imbalance does not detract from the book’s value and is not necessarily a flaw, as it restores Rueff to a position long underrepresented in economic historiography, yet it contrasts with the introduction’s stated intention of treating both authors on an equal footing.

As for Patrick Fridenson’s afterword, it offers an ambitious rereading of Rueff’s work in light of contemporary crises, demonstrating how his monetary analyses and his conception of an “interventionist liberalism” retain relevance today. It skillfully highlights the uniqueness of his career as an engineer-economist, his influence within the senior administration, and the nuances of a thought often caricatured. However, as the text progresses, the critical distance tends to diminish, and the argument tends to valorize Rueff more than it interrogates his limitations. This enthusiasm may seem excessive to readers less sympathetic to his liberal legacy, particularly to supporters of Keynes. Despite these reservations, the afterword provides a dense and stimulating synthesis of Gonjo’s work.