The Coming Gold Standard
The Daily Bell – by Staff Report
Return to the Gold Standard would be madness … I was, until recently, Economics Editor of The Telegraph, but these days I am at the Kennedy School of Government at Harvard, where I will blog occasionally when I’m not knee-deep in homework. If you so fancy, you can still find my book – 50 Economics Ideas You Really Need to Know – here … I almost spat my coffee across the room when I saw the headline plastered across the front of the FT this morning: Robert Zoellick, president of the World Bank, is calling for a debate on the return to the Gold Standard, it said. Of course, when you read the column upon which the news story is based (subscription only, this being the FT), it is far less clear that Zoellick really wants a return to the 19th century international macro-economic structure. Instead, he merely seems to have name-checked gold as a possible mechanism to help us wean ourselves off our reliance on the dollar as the world’s reserve currency. – UK Telegraph/Edmund Conway
Dominant Social Theme: Gold is a barbaric relic and the future of money has nothing to do with it.
Free-Market Analysis: We will try to address Edmund Conway’s screed against gold as best we can. The prejudice it shows is startling and reveals once again that intelligence, in our view, is no substitute for wisdom. It is interesting to note that those who may come from privilege and are numerically adept may have no deeper insights than anyone else – and often less – in the modern day. Professor Conway may be a brilliant man and a successful journalist, but he is apparently steeped in the intellectual prejudices of his class. He may teach at Harvard but when it comes to economic matters (apparently his specialty) he seems to have little taste for the sweep of monetary history. We will take his arguments one at a time: