posted 28 May 2008 04:43 PM
I've been browsing a few websites devoted to economics and investing of late, and one thing that leaps out at me is that there seems to be a fairly strong correlation between a libertarian (in the contemporary North American sense of the word) outlook and being in favour a return to the gold standard. Fiat currency is universal today (except for some private schemes like e-gold), and even some libertarians accept the idea (it makes sense, really, if only because a gold standard seems impractical) but the popularity of gold among this crowd is interesting.
So why is this? Is it simply because a gold standard has the effect of tying the hands of the government with regard to economic matters, or are there more sophisticated reasons?
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Stephen Gordon
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posted 28 May 2008 04:54 PM
None that I'm aware of.
I think Ayn Rand once claimed that the gold standard had some sort of moral superiority (dunno why), so that might explain some of it.
As a policy instrument, its weaknesses are pretty much well-established and well-understood. Here's a quick counterfactual for what the past few years would have been like in the US if they'd been on a gold standard. It's not a pretty picture.
posted 28 May 2008 08:05 PM
Thanks for that link. Sums up what I suspected pretty well, actually.
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posted 28 May 2008 04:43 PM
