This paper presents the case for a return to an system. The main point of the analysis in this paper exchange rate system resembling that which preis in fact to show why modem critiques of traditional vailed in the Bretton Woods period, or which logic here are in fact unjustified, prevails within Europe at the present time. That is, it argues the case for a system of mostly fixed rates The paper is in five parts. I begin with some broad, that can sometimes be adjusted. even philosophical questions about the reasons for even considering a return to fixed rates. The second The argument is not an enthusiastic one. I do not part documents what I believe to be the key thing claim that an ' adjustable peg' system will solve all that we have learned in the past fifteen years: that of the problems of the current system, or that it will foreign exchange markets behave much more like be without problems of its own. However, the the unstable and irrational asset markets described experience of floating rates has made the adjustable by Keynes than the efficient markets described by peg look much better in comparison, and greatly modem finance theory. The third part then asks reinforced the case against letting exchange rates be what harm this instability does, and argues that determined just like any other asset price. conventional efforts to test for serious costs—which generally fail to show much harm from exchange Fashions in exchange rate regimes go in obvious rate instability—are likely to miss the main action, cycles. In spite of the vast additions both to our The fourth part examines the advantages of exchange store of knowledge and to our theoretical sophistrate flexibility, and asks whether occasional parity ication since the 1940s, practical arguments against changes are a good enough substitute. Finally, the flexible rates are not very different from those fifth part tries to tie the whole argument together, advanced by the architects of the Bretton Woods offering a case for an adjustable peg system.