Polymnestor kills Polydorus. Engraving de Bauer for Ovid’s Metamorphoses
Originally posted on Tuesday, April 15th, 2014
Virgil, in Book 3, line 56 of the Aeneid,
reflecting upon the the treacherous murder of Polydorus:
Quid non mortalia pectora cogis,
Auri sacra fames?
Fell lust of gold! abhorred, accurst!
What will not men to slake such thirst?
(translated by John Conington)
The phrase “auri sacra fames” was appropriated by the ever erudite Keynes as the title of a September 1930 polemic against the gold standard. Of more than passing interest, Keynes seems to hint that his is an indictment of the central bankers of his day for hoarding gold — sacra fames! — thereby crippling the gold standard, rather than an indictment of the gold standard itself:
Of late years the auri sacra fames has sought to envelop itself in a garment of respectability as densely respectable as was ever met with, even in the realms of sex or religion. Whether this was first put on as a necessary armour to win the hard-won fight against bimetallism and is still worn, as the gold-advocates allege, because gold is the sole prophylactic against the plague of fiat moneys, or whether it is a furtive Freudian cloak, we need not be curious to inquire. But we may remind the reader of what he well knows—namely, that gold has become part of the apparatus of conservatism and is one of the matters which we cannot expect to see handled without prejudice.
One great change, nevertheless—probably, in the end, a fatal change—has been effected by our generation. During the war individuals threw their little stocks into the national melting-pots. Wars have sometimes served to disperse gold, as when Alexander scattered the temple hoards of Persia or Pizarro those of the Incas. But on this occasion war concentrated gold in the vaults of the Central Banks; and these Banks have not released it. Thus, almost throughout the world, gold has been withdrawn from circulation. It no longer passes from hand to hand, and the touch of the metal has been taken away from men’s greedy palms. The little household gods, who dwelt in purses and stockings and tin boxes, have been swallowed by a single golden image in each country, which lives underground and is not seen. Gold is out of sight—gone back again into the soil. But when gods are no longer seen in a yellow panoply walking the earth, we begin to rationalise them; and it is not long before there is nothing left.
More recently, Neo-Keynesian Paul Krugman, in a column entitled Lust for Gold, a direct allusion to this essay by Keynes, offered an uninformed screed against “goldbuggism” (where he conflates advocacy of the classical gold standard with speculative investment in gold, its diametric opposite). Prof. Krugman concluded his op-ed (written during the gold price decline of last year):
So will we be seeing prominent goldbugs change their views, or at least lose a lot of their followers?
I wouldn’t bet on it. In modern America, as I suggested at the beginning, everything is political; and goldbuggism, which fits so perfectly with common political prejudices, will probably continue to flourish no matter how wrong it proves.
Prof. Krugman, in 2011, forthrightly admitted that he does not read views contrary to his own:
Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously. I know we’re supposed to pretend that both sides always have a point; but the truth is that most of the time they don’t. The parties are not equally irresponsible; Rachel Maddow isn’t Glenn Beck; and a conservative blog, almost by definition, is a blog written by someone who chooses not to notice that asymmetry. And life is short …
And thus his writings frequently descend to polemic rather than exercises in intellectual integrity and interest. Proponents of the classical gold standard stand for monetary integrity. We do not lust for gold.