Keynes never proposed a “global paper currency”, what he proposed was “Bancor”, which was to be a supernational accounting unit (valued in gold, BTW), which would essentially function as a “global reserve currency” - countries would have retained their national currencies, just as they have over the last few decades when the US dollar essentially served some of the same functions.
Keynes proposal addressed some very real problems (for example, GOOGLE “Triffin dilemma”), some of which are again becoming apparent due to the destabilization of the dollar as a reserve currency.
As a result many proposals based in part on Bancor-like systems have been advanced by economists and politicians across the political spectrum, for example the use of IMF Special Drawing Rights to serve the same functions.
An excellent suggestion. Let me post an excerpt here -- it's important.
The Triffin dilemma (or the Triffin paradox) is a theory that when a national currency also serves as an international reserve currency, there could be conflicts of interest between short-term domestic and long-term international economic objectives. This dilemma was first identified by Belgian-American economist Robert Triffin in the 1960s, who pointed out that the country whose currency foreign nations wish to hold (the global reserve currency) must be willing to supply the world with an extra supply of its currency to fulfil world demand for this 'reserve' currency (foreign exchange reserves) and thus cause a trade deficit.The use of a national currency (i.e. the US dollar) as global reserve currency leads to a tension between national monetary policy and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account: some goals require an overall flow of dollars out of the United States, while others require an overall flow of dollars in to the United States. Currency inflows and outflows of equal magnitudes cannot both happen at once.
I wish those FReepers who think our trade deficit is caused by our high wages and can be fixed by tariffs on imports would read the above carefully. Our long-running trade deficit is caused by the Fed's half-century of inflationary policies combined with our status as the world's reserve currency issuer. The inflation raises prices and wages at home and the demand for dollars abroad prevents the dollar's foreign exchange value from dropping enough to compensate for the price spiral.
It leaves us uncompetitive (taxes and regulations don't help any).
The result is a trade deficit that has been growing since the LBJ administration which is, coincidentally, when the Fed began its massive inflation. If we returned to a gold reserve standard, many of the ills that beset the American economy would fix themselves virtually overnight.