Ok, so the actual title of the article is “10 Things Every Economist Should Know About The Gold Standard“. But by now you know that my opinion of modern economists is, well, less than complimentary. And everyone needs to know about the gold standard, because after the world economy crashes we are going back on some form of the gold standard.
Anyway, here is the list (with some brief commentary by moi):
1. The Gold Standard wasn’t an instance of government price fixing. Not traditionally, anyway.
2. A gold standard isn’t particularly expensive. In fact, fiat money tends to cost more.
3. Gold supply “shocks” weren’t particularly shocking. Gold is hard to get, and pretty much impossible to destroy. So the supply of gold is very stable compared to other commodities.
4. The deflation that the gold standard permitted wasn’t such a bad thing. In fact, it was understood that increases in productivity under a gold standard would necessarily lead to prices falling.
5. It wasn’t to blame for 19th-century American financial crises. No, it wasn’t. So who was to blame? Central bankers.
6. On the whole, the classical gold standard worked remarkably well (while it lasted). The 100 years of prosperity from 1814 to 1913 bear this out. Economic growth peaked during this period, both in the U.S. and elsewhere.
7. It didn’t have to be “managed” by central bankers.
8. In fact, central banking tends to throw a wrench in the works. In fact, central banking tends to screw up the economy and send it into alternating phases of boom and bust.
9. The Gold Standard wasn’t to blame for the Great Depression. In fact, Milton Friedman, Murray Rothbard, and other modern economists blame the Federal Reserve and its policies for the Great Depression.
10. It didn’t manage money according to any economists’ theoretical ideal. But neither has any fiat-money-issuing central bank. Money is just a tool that people use to get what they want. It doesn’t need to be ‘managed’ by the ‘experts’ at the Fed.
The author of the article does a much better job of explaining these points than I did. You should click on the link and read the whole thing.