As Master of the Mint, Sir Isaac Newton played a critical role in the establishment of the classical gold standard that would endure for almost 200 years. Newton was a seminal scientist, but he is not the only towering savant to participate in the creation of sound money.
Nicolaus Copernicus first established that the Earth goes around the Sun, overthrowing the ancient and then prevailing Ptolemaic view that the Sun goes around the Earth. It was one of the great breakthroughs in science. Copernicus, among other things a physician, was a polymath. He made a significant impact in monetary theory with a treatise on the reform of Prussian coinage.
It is at least somewhat ironic that those who seek to discredit the gold standard often take rhetorical refuge in the words of Creationist William Jennings Bryan and others of an unscientific turn of mind.
The cosmology of Copernicus and Newton’s Laws of physics are works of the most rigorous minds in history. The insights of these thinkers on monetary theory are equally sound—as demonstrated in the laboratory of history.
As Herman Hupfeld wrote in 1931 — and as made famous by Sam in Casablanca — the fundamental things don’t change as time goes by.
As stated by Leszek Zygner of Nicolaus Copernicus University:
Copernicus wrote three versions of his treatise on the reform of Prussian coinage in the years 1517-26
This document was produced with Bishop Fabianus Lusianus and members of the cathedral chapter of Warmia in mind and was to support their arguments in debates on monetary reform held during assemblies of the Estates of Royal Prussia (Stany Prus Królewskich). The treatise consisted of two parts. In the first Copernicus discusses general issues related to the theory of money and formulates inter alia a law of bad money driving out good. In the second he focused on the current monetary situation in Royal Prussia and in particular on the decline in the value of Prussian coinage, enumerating its types and explaining the reasons for the decrease in value of individual coins. …
Copernicus was the first to explain the reason for the decrease in the value of money caused by gold and silver coins being made into an alloy with copper in the minting process. He also presented quite a detailed analysis of the debasement process in relation to Prussian coinage, referring to how the good coinage issued by the Teutonic State gradually decreased in value in the aftermath of the Battle of Grunwald (Tannenberg). …
An analysis of Copernicus general views on monetary issues show that he was a follower of the metallist theory of money; he saw the source of the value of a coin in its metal content. For him a coin was a marked (stamped) piece of gold or silver which is used as payment for commodities being bought or sold according to the legal tender laws passed by the issuer, namely the state or the ruler. According to Copernicus all kinds of money have their value (valor) and their estimated value (estimatio); while the value of a given coin depends on the amount and quality of the metal bullion of which it is made, its estimatio is its nominal value set by the overall authority in the country.
Today’s economic conditions reflect a fiat monetary system held together by many tricks and luck over the past 40 years. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement — the gold exchange standard — on August 15, 1971.
Since then we’ve been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the United States and the world economy.
The new Federal Reserve chairman, Janet Yellen, gave a policy speech today at Chicago, where, in a startling gesture, she mentioned three working individuals by name — Jermaine Brownlee, Vicki Lira, and Doreen Poole. They lost their jobs the Great Recession and have been struggling ever since. It was a refreshing, even affecting demarche by Mrs. Yellen, who has made a return to full employment a public priority. She underscored her sincerity by telephoning Mr. Brownlee and Ms. Lira and Ms. Poole before delivering her speech.
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?
... 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). In both cases, he pointed out, individual acts can be “indeterminate,” but the pattern of large numbers of individual acts can be predicted as a matter of probability. And so in economics no less than physics, as he later wrote, “A scientific theory is considered correct only if it makes forecasting possible.”
"Forerunners of man lived upon the planet several million years ago. But the unique, modern, social order of man – civilization – emerged only four to five thousand years ago. Historical and archaeological evidence suggests that the institution of money evolved coterminously with civilization. From the standpoint of the 100,000-year history of Homo sapiens, civilization and money are but young and fragile reeds. Today their very existence is threatened by financial disorder."
There is a lot of bad behavior in the global political and monetary world. Much of it comes in countries that should know better. Recep Tayyip Erdogan’s Justice and Development Party (AKP) easily won municipal electons in Turkey but the party’s candidates won far short of the nation’s votes.
Hostility toward gold has a long pedigree.
19th century depiction of Pliny the Elder courtesy of the Library of Congress
Gaius Plinius Secundus, commonly known as Pliny the Elder, in his The Natural History, Book 33, section 3, writes:
Would that gold could have been banished for ever from the earth, accursed by...