Gold
There is nothing more thankless than attacking a basic assumption people have, never question, and can hardly be encouraged to think about. These hard-wired assumptions are taboo in the sense that you may speak about them…to little consequence. Therefore, I am tempted to follow Wittgenstein’s advice that ”Whereof one cannot speak, thereof one must be silent.”
However, I have spent years reading about the origins of money and cannot but help but question the basic assumption that gold has inherent value. Discussing monetary policy with people, the standard “contrarian” argument is that we should move back to the pre Bretton Woods system and back our currency once again with gold. Do away with fiat currency. Go back to sound money. Tender backed with something of substance. Yeah, right.
They argue, in too many ways to summarize here, that if instability topples governments, then gold will be the backstop to a meaningless paper currency. That is to say, no one in anarchy would want a former government’s tender for any reason to exchange goods. But my question is: fine, but why the f*ck would they want gold instead? If a nation becomes a failed state, my personal needs would be water, ammunition, food, and if possible- some sort of lodging and access to oil/electricity. These are the only vital goods when things have gotten so bad that we must burn our own currency to keep ourselves warm. If some one came by and offered me a nugget of gold in exchange for any of the above, I would secure said ammunition and ask him to be on his way. The value of a yellow, dense, shiny, and malleable metal is of little concern to me. ”But, but, but you could use it to facillitate barter” If that statement is true, it is only because we all collectively agree that gold should be used in such a fashion, not that it has inherent value. In the modern age, we have discovered far more rare metals (and other substances) that would be easier to control the access to (whereas gold mines are discovered regularly and are controlled by a limited number of people), which serve as a better store of value (note: many of the gold bars kept in London banks in the best of conditions have deteriorated to the point they can no longer be sold at market value). Here’s a quick summary of these alternatives, including Oil ETFs. And some of these alternatives actually have a practical function.
There is a value of gold, which I won’t get into here, but it has only peripheral relationship to the reasons men typically bandy about. There is in fact a reason man has gone to great lengths to secure gold and create (necessary but not sufficient) justifications for its use to back currency. And here I shall heed Wittgenstein’s advice and be silent.
“Having behind us the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.” - William Jennings Bryan
