I have new article on, “The Gold Standard and Monetary Freedom.”
On March 29th, I participated in a debate on “Whether America Should Adopt the Gold Standard,” which was held at Northwood University in Midland, Michigan, and was co-sponsored by the Atlas Economic Research Foundation and the Forum for Citizenship and Enterprise.
I spoke on behalf of the”affirmative” position, of course.
I argue that governments can never be trusted to not abuse their control of the monetary printing press to fund their budget deficits and create inflation. And that central bank manipulation of paper money always carries the danger of distorting interest rates and the banking system, setting in motion the disasters of the business cycle.
The gold standard, I argue, may serve as a form of “monetary constitution,” and a way-station leading to the final goal of full monetary freedom with competitive free banking.
Richard Ebeling
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If you believe in monetary freedom, then you should be OK with private banks issuing money in any form, backing that money with any assets they choose, and choosing whether to make their money convertible into various physical goods. Under this system, there would of course be bankers whose money is inconvertible, and some whose money has lost value because of a loss of backing. Customers can deal with these bankers if they want, or they can gravitate to more sound banks.
If you think this is ok for private banks, then you should not object to government banks doing the same thing. The only really objectionable thing about government involvement in the money system is when government suppresses privately-issued money.
Dr. Ebeling:
Significantly (to me) you speak of the gold standard as a “way station” in a process leading to a regime of sound money.
I say “sigificantly” because, I myself, have used the very same phrase many dozens of times (quite a few in these very comments) in support of an argument (almost) directly counter to your own: that the gold standard is but a way station on the road to, well, exactly what we experience at present.
Between the two, it’s obvious the preponderance of evidence is on my side.
But I don’t see this as a contest between two views, only one of which is correct: in my opinion, the crux of the matter lies alsewhere (and I am prepared to locate it precisely for you and anyone else).
Moreover, the matter to which I refer as the “crux” should be more obvious than has been the case among Austrians: the acceptance of the role of authority in determining the “value” of money, down through many ages of history and, indeed, codified in our very own Constitution. To economists of all (including Austrians) neoclassical schools, the very idea of a few men telling everyone else what the value of money (or anything else) shall be should “raise a red flag” almost as obvious to them as would be a similar provision that “Congress shall have power to regulate the speed of light, the attraction due to gravity, and all thermodynamic relationships.”
It’s a simple enough (or should be, especially for Austrians) error to explain: the Constitution of the U.S. (and all previous monetary regimes) arose long before the recognition of that to which we refer as the “subjectivity of value”; had its framers the advantage of the newer understanding of economic science, it’s likely they would not have fallen into the error which, even to this day, renders all such efforts (including proposed reversion to presumably less unsatisfactory conditions of the past), ultimately, futile.
Requirements posed by the present high (and increasing) degree of economic interconnectedness are for media of exchange free of anti-market influence by authority. There’s no question whatever of progress in that wise without fundamental (and far-reaching) reordering of the law. That is true not only in this nation but in all–especially the technologically advanced–but must begin in at least one to have any chance of supplanting present arrangements and regimes.
Governments that go on gold standards go off gold standards as politics dictate. Gene Berman has it exactly right.
Speaking of Gold Standard…I am hearing that paper money is basically worthless anymore and that gold coins may take its place. I found a interesting article with some good info on this website if anyone wants to check it out.
http://www.thegoldstandardnow.org/key-blogs/201-the-economic-history-associations-encyclopedia-article
……This article is a significant contribution to the literature and is among the most lucid extant overviews of the gold standard: what it is, what are its variants, and how both the classical and interwar gold standards operated……
Thank you Mart for that information I did find it very interesting. There is a lot of information on this website.
Here is a link to one of the articles that i found interesting myself…
http://www.thegoldstandardnow.org/key-blogs/198-international-gold-production-gold-rush-
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