The Mermaid with the Sword: Poland’s Search for Monetary Stability and Military Security through Gold

James, Harold and James, Marzenna (2026) The Mermaid with the Sword: Poland’s Search for Monetary Stability and Military Security through Gold. FINANCIAL AND ECONOMIC REVIEW, 25 (3). pp. 5-22. ISSN 2415-9271 (print); 2415–928X (online)

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Abstract

Poland's monetary history over the past century reveals an interdependence between monetary stability and national security. This paper argues that the two are not parallel policy problems but facets of a single predicament: sound money cannot be sustained in a state whose existence is in doubt, and no state can secure itself without the resources that monetary discipline makes available. Across regimes as different as the interwar Second Republic, German occupation, communist planning, and post-1989 democracy, financial fragility has repeatedly undermined strategic security, and strategic insecurity has destroyed monetary credibility. At the convergence of these twin crises, one asset recurs with striking regularity: gold. Its persistence in Polish public consciousness – from the name of the currency to the central bank's purchases in the 2020s – is not an atavism but a rational response to an enduring structural predicament. The Warsaw Mermaid, sword in hand, embodies this argument: the lure of monetary expansion on one side, the demand for defence on the other, and a currency perpetually caught between them.

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