In the article below, published by the American Spectator, Lewis Lehrman makes the case for a modernized gold standard. A true gold standard:
- provides long-run price stability;
- generates “network effects” which integrate and contribute to the growth rates of competitive trading nations, just as it did during the Industrial Revolution;
- a “just social order” which favors savings over speculation, and rising living standards for all, not just the favored few;
- restrains abuse of power by those who would expand the power of government through excessive debt and debasement of the currency;
- promotes “dis-hoarding” and favors productive investment
- rebalances world trade.
He concludes by outlining 5 concrete steps “to get from here to there.”
A Road to Prosperity
by Lewis E. Lehrman
Gold, a fundamental, metallic element of the earth’s constitution, exhibits unique properties that enabled it, during two millennia of market testing, to emerge as a universally accepted store of value and medium of exchange, not least because it could sustain purchasing power over the long run against a standard assortment of goods and services. Rarely considered in monetary debates, these natural properties of gold caused it to prevail as a stable monetary standard, the most marketable means by which trading peoples worldwide could make trustworthy direct and indirect exchanges for all other articles of wealth.
The preference of tribal cultures, as well as ancient and modern civilizations, to use gold as money was no mere accident of history. Nor has this natural, historical, and global preference for gold as a store of value and standard of measure been easily purged by academic theory and government fiat.
Gold, by its intrinsic nature, is durable, homogenous, fungible, imperishable, indestructible, and malleable. It has a relatively low melting point, facilitating coined money. It is portable and can be readily transported from place to place. Gold money can be safely stored at very low cost, and then exchanged for monetary certificates, bank deposits, and notes—convertible bills of exchange that efficiently extended the gold standard worldwide.