Quote:
Originally Posted by Irenicus
Spoiler for gold standard rant:
Asking for the Gold Standard is seriously asking for nasty things to happen. People need to get over the idea that money has to be tangible. It is "fake." It's always been fake. Trying to make it tangible by using a specific glittery mineral had always been a stopgap measure by humans who felt the need to make their intangible riches tangible.
Gold isn't the economy. Gold can be mined whether the economy is growing or shrinking, and any discrepancy is effectively going to be adjusted by severe and unstable inflation and deflation. Money should, ideally, be proportional to the size of the economy -- be just about enough so that everyone can properly carry out the transactions of *goods and services* and especially services in the modern tertiary economy, because that is what money is *for*.
That historical civilizations before our time were not capable of achieving a relatively stable form of a fiat money system doesn't mean we should go back to how they did things. The pre-World War I system survived on inertia. The post-World War II system survived because the United States was the global hegemon and it had all the gold. The latter "gold standard" was really a dollar standard.
Gold doesn't offer stability. That's a lie, no other way to say it. What gold, or silver, or any other shiny metals-based economy historically meant is that the ancient Roman Empire faced crises after crises as the shinies flowed East and silk flowed West. What it meant is that 15th century Europe was teetering on the brink of economic collapse as massive Venetian silver convoys desperately braved a pirate-infested Mediterranean because a Bohemian mine ran out, and only a historical accident by an explorer under the employment of Castile saved it from further downfall. And it meant that a few centuries later the Spanish Empire at the height of its power was to be hit by devastating bankruptcies because it dug up too much gold and ended up making all that gold less valuable (imperial adventures aren't very profitable if you've already dug up too much shiny loot). It also meant that Ming China faced an entirely avoidable economic collapse because its trade balance was too good and silver flowed in to displace an existing sophisticated paper money system, leaving it vulnerable to a global disruption centuries later. I bet they really regretted abandoning the Song-era paper money innovations then.
In short, it meant another element of unnecessary risk that is not actually based on actual economic activity but is rather yet another dependence on a rare resource. We've had enough of that with oil, thankyouverymuch.
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Why put it in a spoiler tag? It is hardly a rant and it makes sense.
The idea of money being tangible is so that people will trust and use it. Who wants to go back to the complexity of bartering anyway?
Besides, there isn't exactly a need to keep it really tangible. Just an illusion will do - like how people got the illusion of the service sector being wholly worth the credits it is given. In fact, part of it isn't worth anything at all because you can do it yourself.