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On 14th October 2020, Antal E. Fekete, the Hungarian-Canadian economist who saw himself as a monetary theorist following the tradition of Carl Menger, died in Budapest. Behind him was an eventful and fruitful life which was quite typical of the crazy last century. His experiences eventually filled Fekete with dark forebodings for the current century. We can only hope that this crazy year won’t become characteristic of an entire era, as his year of birth did.

Antal Endre Fekete was born on 8th December 1932 in Budapest. Mass unemployment was rife in the midst of a deep global economic crisis. Hungary was heading towards National Socialism on the back of a severe banking crisis. The totalitarian, anti-Semite Gyula Gömbös had taken over the government shortly before Fekete’s birth. All around, belief in the omnipotence of politics was leading to a spiral of interventionism and polarisation which would ultimately lead to the old Europe being destroyed by totalitarianism and war. Monetary policy played a role in this that is underestimated to this day.

Fekete was one of the few old Europeans to recognise the central role of money, on the positive side as a means of amicable division of labour, on the negative side as a casualty and lever of political intervention spirals. This led the mathematician to monetary theory in which he sought to expand and update the old Austrian School of Economics. As with all original contributions, it is too soon to definitively assess whether he introduced new errors and what these errors were. Yet his prominence as a sharp thinker, who combined theory with profound historical knowledge, is undervalued. This is partly down to his quarrelsome personality which came between him and almost all of his comrades-in-arms and companions. But also partly because economics touches on questions of existence which hardly allow for objective sobriety. Even the representatives of the Austrian School of Economics have to show their colours again and again in the madness of time, and the discourse is influenced by ideology, fears and wishful thinking.

History provided Fekete with drastic and life-threatening lessons. In 1932, Hungary was still using the gold standard, a pengö was defined as just over a quarter of a gramme of gold (around 15 euros today). When the forint was introduced in 1946, it replaced 400 octillion (29 zeros!) pengös, after the worst hyperinflation in history. Prices had been tripling every day. Today a forint is worth just over quarter of a euro cent.
In light of this development, it is astonishing that Hungary has not produced more great monetary theorists. This is probably because the intellectual consequences of such socio-economic disruption are always dramatic. Among the consequences are a declining aptitude for learning and a growth in escapism, whereby, paradoxically, the perception of the damage dwindles as the damage increases. This is why monetary policy is so popular, so formidable and so underestimated.