Comments (5)

• David Spellman

  It is ironic that our worst economic problem has such a simple but unimplementable solution: return to the gold standard. Alas, that is so very much like telling a crack cocaine addict the elegant solution: quit using crack. Yup, it could happen.

  I tirelessly try to educate anyone who will listen, but it sure is lonely. What I have found in life is that when people believe in something, they will act accordingly against all contrary evidence to the point of self-destruction. The article touched on that point in so many words.

  All I can say is that I am grateful for the work of intelligent people willing to stand up for the truth against in spite of persecution and sacrifice. Thankfully there are kindred spirits here. I really enjoy reading the articles.

  Published: July 26, 2006 1:57 PM

• gene berman

  David:

  If you've been reading at these sites for any length of time, you'll have already observed that Lew is the very best of all the writers--on almost any topic he chooses.

  BUT.

  Nothing Lew or anyone else can write can make a "return to the gold standard" any more than a chimerical notion, as was the gold standard itself.

  The gold standard was a creation of authorities and worked well for certain periods in the past. No doubt, if re-instituted, it might work well for additional periods but would, ultimately, be as certainly subject to the very same pressures as has previosly led to its demise. The failure to recognize that (really easily-observable) fact was shared by both Mises and Rothbard: my own guess is that their slightly different prescriptions for a sound money of the future were simply based on a somewhat contrary-to-reality "wishful thinking."

  I believe that I have beeen able to sketch out the shape and some particulars of a truly universal sound money free of most weakness of past systems. Of course, money itself would be gold. For the moment, I am keeping my central (and novel) ideas to myself but intend to publish them to a small circle who've axpressed interest (about a dozen, most of whom post or write here) by e-mail when ready (though I cannot promise when this will be; I'm already overdue--but a guy's gotta make a living). If you'd like to be added to my list, just send your e-mail address to me at gene.berman@verizon.net

  Published: July 27, 2006 9:40 AM

• Black Bloke

  I would've figured there'd be more comments on this piece than this after a day.

  Published: July 28, 2006 2:59 AM

• Roger M

  In reading about international finance, I found a strong desire among economists for an international currency because they think the current system is too volatile and leads to crises and imbalances. The answer, gold, is right in front of them, but they refuse to see it. Amazing.

  Published: July 28, 2006 10:26 AM

• gene berman

  Roger:

  I don't know the economists (other than Austrians--a very small "fringe" alongside the mainstream) who believe the current system too volatile or leading to crises and imbalances. The current system is precisely that most in accord with the plans of mainstream economists who attribute volatility, crisis, and imbalance to the older, failed gold standard which it replaced.

  The gold standard cannot be the answer. But the problem is not with gold itself but with the idea of a "standard" imposing what have proved to be, time and again, politically unacceptable limitations on governments' wishes to interfere in economic affairs for one or another irresistable (at the time) benefit.

  If no COMPLETELY DIFFERENT monetary regime can be found, there is no chance whatever to reduce, much less eliminate, periodic monetary crises, devaluations and business cycles--none whatever--all wasted breath.

  However, I have conceived just such a completely different system. So different, in fact, that the very difference would cause many to believe it couldn't possibly "work." And, because no such system has ever existed anywhere, many would be inclined to dismiss it out-of-hand as unworkable. Even I, its author, have no assurance or even great confidence as to its workability. The very best thing I can say about it is that it's never been tried before and there's no over-riding reason why it would be impossible.

  Sooner or later, I'll get around to preparing a paper to outline my system and will, initially, circulate it to a small group of interested parties (mostly on the Mises.org blog). If you'd like me to add your name to my list, send your e-mail address to gene.berman@verizon.net

  Published: July 30, 2006 2:06 PM