The true gold standard skews neither left nor right. It offers a benevolent fairness, derived from its integrity.
Perceptive humanitarian populists of the left, as well as those of the right, have recognized this.
George Bernard Shaw, the great literary critic, playwright, and essayist who won the 1925 Nobel Prize for literature, co-founder of the London School of Economics, an ardent and eloquent socialist, had this to say about the gold standard in his 1928 The Intelligent Women's Guide to Socialism and Capitalism, chapter 55, p. 263:
“You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And, with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
History decisively demonstrates that neither gold nor human nature are subject to change. By relying on what Shaw termed "the natural stability of gold" -- rather than "the honesty and intelligence of the members of the government" -- whichever party happens to be in charge -- the economy demonstrably has a greater propensity to thrive and create a climate that creates jobs and opportunity. Gold skews neither left nor right. It is a fundamental instrument of any humanitarian economic policy.
... While the Fed's easy-money policies have not produced many jobs, they have produced a persistent, low rate of inflation that is choking the American middle class. Since the asset purchases began five years ago, the average American family has experienced rising prices and stagnant wages. The resulting decline in living standards explains why voters ranked rising prices nearly tied with unemployment as their top economic concern during the 2012 election.
... It is difficult to interpret [Jeb] Hensarling’s declaration to hold hearings on “the entirety of their hundred year history and what America has looked like since adopting a fiat currency” as anything but an intention to bring the Commission up for a vote. Hensarling promises to process vast amounts of information. The constraints on a committee hearing, and on a committee staff, cannot do such a huge topic justice. As Rep. Kevin Brady put it in his own remarks at Cato, a “brutally bipartisan” Commission — with Hensarling a Commissioner — is called for.
Publisher's Note: Originally released in June/July of 1991, this detailed report discusses Jacques Rueff's economic theories and applies them to modern economic events.
By John D. Mueller
Who Was Jacques Rueff?
..Jacques Rueff is interesting today for a number of reasons. He was a good economic theorist because he was a practitioner of economic policy – and vice versa.
Trained in science and mathematics at the Ecole Polytechnique, Rueff devoted his first theoretical work to showing that the same scientific method applies to “moral” or “social” sciences like economics as to the physical sciences (Des Sciences Physiques aux Sciences Morales, 1922)....
"By means of the lawful stamp of convertibility to gold, a near-worthless paper was suffused with a monetary life of its own. It circulated in place of coins and bullion because it was even more convenient, equally divisible, and above all secured by the substance of real money. Moreover, convertible paper and deposit currencies conserved still further the scarce mineral, labor, and capital resources previously invested in the production and circulation of precious bullion or coins. One sees in the evolution of this extraordinary commercial institution of exchange that money became a unique conservator, and the effective mechanism of growth of a civilization born of scarcity."
This cartoon cleverly presents the tension between the proponents of the classical gold standard and the prairie populists demanding "the free coinage of silver."
Image courtesy of authentichistory.com via BigThink.com
In the mouth of the "silver dog with the golden tail" is a bone, labeled Election.
The 1896 election, which the gold standard...
Unemployment is up in Poland – now 13 percent – and spending is down. But Poland still is doing better than southern neighbors – thanks to the medicine it took when taking economic medicine was unfashionable. The Financial Times’ Jan Cienski wrote: “Growth slowed to only 0.5 per cent in...