Chapter 11
How Not to Advocate a Gold Standard1
Today, there is a growing interest in gold in general and the gold standard in particular as a replacement for the fiat standard that has failed so miserably over the past century.
Yet any attempt at returning to the gold standard is being undermined by statements containing a host of errors, inconsistencies, and contradictions about gold—statements made by those very individuals who are attempting to focus attention on gold and the virtues of a gold standard.
A bad argument advocating a return to the gold standard can be more harmful to the case for gold than no argument at all.
One source of such arguments is that many gold advocates look at gold through the eyes of an investor rather than the eyes of an economist. Consequently, short-term, superficial, and sometimes misleading interest in gold is being encouraged at the expense of long-term education and consistent economic theory. This approach must ultimately be counterproductive and self-defeating. The market is being saturated with literature containing misconceptions and inexact or incorrect terminology. This has led to anti-gold positions (i.e., positions inconsistent with capitalism and a free market), most of which can be traced to poorly defined concepts, discussions drawn out of context, and misidentified cause/effect relationships. The following arguments, terms, and positions regarding gold, its present role in international monetary matters, and its proposed role ...
