Originally posted on Tuesday, November 12th, 2013
As recently noted here, Slate‘s business and economics correspondent, Matthew Yglesias, recently published an interesting critique of Cato’s upcoming monetary conference which Yglesias refers to as Cato Institute Staging Gold Standard Love-In. This drew an immediate, and intelligent, response by ReasonMagazine’s senior editor Brian Doherty.
Brian Doherty courtesy of Wikipedia
Doherty replied with Yglesias: The Gold Standard: Yglesias at Slate Doesn’t Have to Tell You Why It’s Absurd:
Matthew Yglesias yesterday filled some space on Slate with something that pretended to be a critique of the Cato Institute for throwing a conference that considers the possibility that gold might make better money than government/central bank paper.
He doesn’t do anything as gauche as, say, report on what people said there regarding gold, even to critique it.
One of the most interesting points that Doherty makes — a point too seldom made — was that of the softening of the opposition by the great Milton Friedman (whose opposition Yglesias references in passing) to the gold standard:
Friedman, as lots of people don’t know or don’t remember, despite his reputation as the “libertarian who hated gold” got far more mellow about the possible merits of gold-as-money in his later, more libertarian years. See his book Money Mischief, where he wrote that “it does not follow [from the fact that there are costs associated with mining the gold, etc.] that the existence of a gold standard…is a mistake and harmful to society…the verdict is far from in on whether fiat money will involve a lower cost than commodity money,” pointing out that relying on the probity of government managers to guarantee a safe and sane money might have its own risks.
Doherty concludes:
… given the laughability of his “gold is no better than fiat to curb inflation” argument above, I guess he can’t imagine any real reason one might value gold as money.
His argument seems inexplicable, pointless; on the surface it has nothing to do with any actual argument for or against gold as money, says nothing worth saying and is confusing in doing so. It is, I should say, perhaps the very definition of that horrible little twitter-esque mockery term “derp” which appears in its URL, as if Cato is guilty of it rather than the Yg.
The exchange between Doherty and Yglesias is by no means an esoteric or unimportant one. The issue of monetary policy comes more to the fore in the national discourse — including the conversation surrounding President Obama’s nomination of the Honorable Janet Yellen to chair the Federal Reserve Board.
The potential value of the gold standard as an important asset in creating a climate of equitable prosperity has achieved new respectability. Those who wish to follow the core policy conversation would be greatly benefited by studying The True Gold Standard and Money, Gold, and History by Lehrman Institute founder and chairman, Lewis E. Lehrman, Reagan Gold Commissioner… the eminence grise of the classical gold standard and a leading figure in the ongoing debate.
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