I'm just having a bit of difficulty grasping the thought process of those who were proponents of the gold standard ideas of these times. They were for the gold standard but also at the same time, in favor of an elastic money suppley. Obviously you can't really have both; so how was it that they were able to pull off such a scheme? I would imagine the simplest of minds, even after all of the propoganda thrown in their face, would have been able to see that you can't just create gold out of thin air, so question how such a system would operate. Or am I just giving too much credit to the average man or woman during those times?
Perhaps they engaged in coin clipping, price controls, and forcing the use of government bank notes, but then lying about how much gold is backing the notes. Those methods to get an "elastic" money supply are the first that spring to mind.
Well we know that government force was used to push it through. That isn't exactly what I am asking though.
jmorris84: I would imagine the simplest of minds, even after all of the propoganda thrown in their face, would have been able to see that you can't just create gold out of thin air, so question how such a system would operate.
I would imagine the simplest of minds, even after all of the propoganda thrown in their face, would have been able to see that you can't just create gold out of thin air, so question how such a system would operate.
I think the usual answer to that is that prices of everything but gold go down if there is a demand for gold. Nothing wrong with that.
Good ole Rothbard's What has Gov Done to our Money strikes again. page 25 and on
jmorris84: I'm just having a bit of difficulty grasping the thought process of those who were proponents of the gold standard ideas of these times. They were for the gold standard but also at the same time, in favor of an elastic money suppley. Obviously you can't really have both; so how was it that they were able to pull off such a scheme? I would imagine the simplest of minds, even after all of the propoganda thrown in their face, would have been able to see that you can't just create gold out of thin air, so question how such a system would operate. Or am I just giving too much credit to the average man or woman during those times?
Bank note inflation. Also there were times during the 19th century that there was fiat currency like the "Green back". I think the people before me who have commented on his were right to talk about Rothbard. I think he has several works which cover this era.
- The Panic of 1819
- A History of Money and Banking in the United States: From Colonial Era to World War II
- Mystery of Banking
- What Has Government Done to Our Money?
There is also a lecture by Rothbard:
- "The Gold Standard Before the Civil War"
There is another lecture by Thomas DiLorenzo:
- "The Gilded Age and the Gold Standard"
There is another lecture by Thomas Woods:
- "Gold and the Good Guys: A Short History of American Thinkers on Money"
Another lecture by Walter Block:
- "The Economics of the Gold Standard"
Some 19th century sound money types:
William Gouge [1833] - A Short History of Money and Banking
William Leggett [1834] - Democratick Editorials
William Jevons [1875] - Money and Mechanism of Exchange [note: Have not read this work but Jevons is considered an Austrian economist ]
William Graham Sumner [1878] - A History of American Currency
[ I think perhaps there was a universal law in the 19th century in which if your name was William then you had to be a sound money theorist ]
I think that is a good bit of beginning literature on the subject and I'm sure some people can think of something that isn't on this list.
'It is difficult to imagine any normal person wishing to meet Marx for a third time.' - Alexander Gray, The Socialist Tradition
Thanks for the reading suggestions Laughing Man. A History of Money and Banking in the United States: From Colonial Era to World War II is actually what sparked this thread. I'm not finished the book but I am up to the point where he discusses the Indianapolis Monetary Commission. Apparently, those who were inlcuded in the commission were in favor of a gold standard but one that allowed for an elastic supply of money, when needed. At this point, I'm about 200 pages in, have read what has happened while people held this mindset for the previous 100 years and thought, "Here we go again..."
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