{short description of image}  
 

GOLD THE FINAL STANDARD

Nathan K. Lewis

 

Canyon Maple Publishing, New Berlin, N.Y., 2017, 196 pgs. index, bibliography, notes, charts and tables.

 
 

Reviewer comments -
This is a 'gold bug' theoretical treatise that attempts to support the advocacy that the world financial system should be based on gold as a 'standard' of value on which all financial transactions be based. The historical sections mostly discuss the history of currency and do not give sufficient attention to the monetary role of credit. The idea that there should and can be any type of 'final standard' of value is false. Value is not an attribute that can be fixed to any material or imaterial good or service. Value is purely in the mind of individuals and collectively in the 'mind' of society. The value of an item is trasitory, dependent of supply and demand, relative to all other available items to both seller and buyer. Proponents of using gold (or anything else) as a fixed 'standard' generally cite as an analogy the international standards for time, weight, length and other physical properties.

They do not consider that these standards are established by a monopoly power that forces all individuals to accept them. Such a standard for value would require (and in the past did require) a governing dictatorship. But even such a powerful ruler could not maintain such a 'standard'. The physical 'standards' are possible because BOTH the subjects being measured and the standard by which they are measured are fixed naturally. The length of a brick is a fixed characteristic of the brick, and the length of an inch is fixed by the international organization. Consider, that inches always mainain a fixed relationship with centmeters. But gold, dollars, yen, Euros continually change in relation to each other.

In addition, the author's historical narrative in which he claims milenia of use of gold as a standard of value and medium of exchange is false. Gold has been used as such relatively rarely in comparison with silver and even more so in comparison with credit.

 
 

Introduction by George Gilder, another 'gold bug'. Read his own effort - Scandal of Money. He begins with a story from Margaret Mead, a long time discredited anthropoligist. But he provides an excellent, easy, source to some important monetary facts. He notes that the Bank of International Settlements writes that in 2016 the daily volume of currency trade - exchange - was $5.1 Trillion per day - 73 times the value of all exchange of goods and services, 25 times all global GDP. These figures are reported in other sources as well.
But he adds: "Yet this frothy process arrives at no reliable values to guide entrepreneurs and producers of real goods and services as they make their investment decisions across borders."
I disagree, the process itself generates the instatenous, relative spot relationships between the many kinds of money. If it did not, they would create another process.
This introduction provides a good service, since Gilder has filled it with so many of the false beliefs about the history of money, value, and gold. And these are repeated by Lewis in the following chapters. But he is correct in pointing out the fradulent expansion of the finance industry and the way that arbitrageurs and speculators have siphoned off fortunes in paper wealth. But the excesses of the financial industry have nothing to do with the idea that gold could be a permanent and unchanging 'standard of value'. The same kind of financiers used the same methods when silver or gold was used as a medium of exchange - and credit as well.

 
 

Preface

 
 

Chapter 1 - The Study of Currency History
Right off the author excusses himself from considering the most important component of the medium of exchange, credit. He is correct to note that history is by its nature 'complicated'. And indeed, 'finance' is complicated as well. That is all the more reason that it MUST be included in any any study of economics, rather than'simplification by deliberately omitting discussion of finance". He writes correctly: "The world of debt finance not only includes thousands of loan-making banks,in over 150 countries, plus the usual bonds, but also all manner of further complications including such things as money market funds, strutured investments vehicles, and securitized debt instruments..." It appears he is trying to excuse himself. But exchange of goods and services throughout history also involved complicated relationships. He attempts to discount the importance of this for the study of monetary affairs by noteing thatm, after all, all this is accomplished with use of a single measure in each country - for instance dollars, Euros. yen, etcetera. And yes, as he writes, in the19th century the dollar was 'linked' to gold, and in the1

 
 

Chapter 2 - The Ancient World, 3500 B.C. - 400 A.D.

 
 

Chapter 3 - The Medieval Era, 400 - 1500

 
 

Chapter 4 - The Bimetallic Era, 1500 - 1850

 
 

Chapter 5 - The Classical Gold Standard, 1850 - 1914

 
 

Chapter 6 - The Interwar Period, 1914 - 1944

 
 

Chapter 7 - The Bretton Woods Period, 1944 - 1971

 
 

Chapter 8 - The Floating Currency Era, 1971 -

 
 

Chapter 9 - Conclusions

 
{short description of image}

Gilder, George - Scandal of Money

 
{short description of image}

Mishkin, Frederic S. - The Economics of Money, Banking &Financial Markets

 
{short description of image}

Kay, John - Other People's Money

 
{short description of image}

von Mises, Ludwig - The Theory of Money and Credit

 
{short description of image}

Melloan, George - The Great Money Binge

 
{short description of image}

George Selgin - Money Free and Unfree

 
{short description of image}

Podany, Amanda - Ancient Mesopotamia

 
{short description of image}

Graeber, David - Debt The First 5,000 Years

 
{short description of image}

Wetherford, Jack - The History of Money

 
{short description of image}

Wray, L.Randall - Modern MoneyTheory

 
{short description of image}

Ferguson, Niall - The Assent of Money

 
{short description of image}

Martin, Felix - Money - The Unauthorized Biography

 
{short description of image}

Ingham Geoffrey - The Nature of Money

 
{short description of image}

Davies, Glyn - History of Money

 
{short description of image}

Newman, Patrick - Review of Monetary Regimes and Inflation

 
{short description of image}

Bernholz, Peter - Monetary Regimes and Inflation

 
{short description of image}

Mehrling, Perry - The New Lombard Street: How the Fed Became the Dealer of Last Resort

 
     

Return to Xenophon.