Gold Standard

Fed Chair-in-Waiting Benja

The Gold Standard: Perspectives in the Austrian School. Edited with an Introduction by Llewellyn H. Rockwell, Jr.

Recorded at Mises University 2004.

What's the best book on money ever written? That's an easy one: What Has Government Done to Our Money? by Murray N. Rothbard. The Mises Institute is bringing out a new edition, and uniting it with Rothbard's radical blueprint for monetary reform. You can help.

The mythology of gold really grew up with Keynes and the quantity theory. Here are six of those myths: the gold standard is unable to accommodate the needs of an growing economy; the quantity of money is arbitrarily determined; the gold standard is a government price fixing scheme; the gold standard subjects a country to alternating inflation and deflation; the gold standard requires high costs devoted to resources; and the gold standard results in high interest rates.

Murray Rothbard, in this classic essay originally published in 1991, offers the most "pure" proposal of all: private mintage, 100 percent reserve banking, circulating coins, full convertibility.

Today we demand that the price of computers and bandwidth fall month by month but we oddly expect the prices of many other goods to constantly rise (houses, education, health care, taxes). And so we adjust our expectations accordingly. It takes some imagination to see how the system would work if we were guaranteed our right to deflation.

In recent years an increasing number of economists have understandably become disillusioned by the inflationary record of fiat currencies. They have therefore concluded that leaving the government and its central bank power to fine tune the money supply, but abjuring them to use that power wisely in accordance with various rules, is simply leaving the fox in charge of the proverbial henhouse.

Proposals for monetary reform are ubiquitous, but Murray N. Rothbard argued for the 100% gold coin standard.

Presented at the Mises Institute’s first conference, November 16-17, 1983; in Washington, DC.