Solid Gold

Alright. I will put up with a great deal. They can censor my press. They can limit my right to choose. They can define when life begins. They can define my marriage. They can raise taxes on the poorest. They can lower taxes on the richest. They can unilaterally end commitments to international organizations. They can start wars. They can start undeclared wars. They can engage in foreign policy that makes soccer hooliganism look like the Council of Elrond.

But I’m afraid I have to draw the line at a return to the gold standard.

There is room in this world for ethical arguments. There is room for moral values, differing values, and finding a safe space for them all. There is room for discussion of the role of government, where it should be limited, where it should be widened. There is room for discussing what is a medical procedure, and what medicine should the government sponsor. All of these things are legitimate conversations. I may not like the method of discourse, I may not like most (if not all) of the parties involved, but this is democracy. These are legitimate.

A return to the gold standard is not legitimate.

It is not a point of view. It is not an opinion. It is not a potential solution to a problem. It is not an ethical or a moral posit. It is not a scientific alternative.

It is ancient history. It is a way of doing things which worked when the world was young. It is as poorly optimized to modern conditions as swordfighting to the modern battlefield. We may bemoan this fact, as we mourn the loss of the horse-drawn buggy. But it is at best a dream; at worst, it is the Flinstones of economics.

Metallism was arguably more suited to such times – when populations were in the thousands, when transportation was in the care of horses, when numbers were in the care of abaci, when letters were in the care of riders with collars upturned against the wind, when giant Hobbes-demons wandered the land beating whole villages with great States of Nature +5 (+7 against orcs!) – more suited to such times, I say, than modern methods. Modern methods which are optimized to a world of instant communication, of efficient transportation, of corporations which exceed in size the countries of the Renaissance, of a world of hundreds of languages and millions of self-motivated agents all working in harmony towards the efficiency of a marketplace and the benefit of all.

Modern currencies are backed by wealth. The wealth of nations – the wealth of people – the energies an skills of people – the things they can do. Modern currencies do not have inherent value; their value is determined by the sum of things and the sum of people, by supply and demand and nothing else. The dollar is not a commodity; it is the lubrication which allows commodities, like cogs in a great machine, to move and turn. It is not a part of the machine; it is dynamism. It is the motive force. It is nothing, and so it serves everything.

To tie this force to a particular commodity is regression without purpose; it is to tie the neck of the world to a loadstone. Be it gold or silver, diamonds or diadems, oil or tulip-bulbs, soy beans or beanie babies*, there is no commodity that has an absolute value but what the market has and the market desires. To pretend otherwise is to fall into the trap of believing in absolute values. It is to empower a government to determine value. It is – and you will forgive me for a McCarthian violation of Godwin’s Law – DOCTRINAIRE COMMUNISM. Whatever abuses that poltergeist has suffered, and whatever its difficulties as a form of *governmet*, I still must say that I prefer not live in a society which embraces its tenants as a form of *economic policy.*

Also if you revert to the gold standard you are guaranteed to bring about the rising of Zombie John Maynard Keynes.

And he will be pissed.

*Perhaps things are different in Heaven. Perhaps under God’s watchful eye, monetized beanie babies graze on wild tulips, blow South Sea Bubbles through little wands, ride wild dot-coms over the horizon, and live in beautiful castles on which they have interest-free subprime mortgages. Myself, I do not live there.


~ by davekov on 24 August 2012.

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