In this issue we look at gold, or rather its role in economic life and the prospects for rendering it monetarily obsolete. The topic of gold remains the background of modern social and economic existence. When all is well economically, we tend to forget it; but in crisis moments (short or prolonged) we, or some of us, turn to gold as a hedge against collapsing values. Why does gold have this significance and is it something we can outgrow? The theme was prompted by a recent broadcast on the BBC in which journalist Matthew Hart, BBC Radio 4, 21 January 2014, discussed our continuing reliance on gold.
The topic is brought into focus here in this month’s Sign of Our Time, comprising extracts from The Golden Revolution by John Butler in which he makes the case for a return to the gold standard. Writing in 2012, Butler argues that today’s excessive debt and financial instability result from government-backed finance (fiat money) which does not have the secure anchor of gold to prevent it from becoming boundless. No national currency, not even a global fiat currency, can solve this problem. Only a return to gold.
Before looking at the monetary debate about gold, a description of its extraordinary properties is provided by Gerard Klockenbring in Sovereign Metal. Though many would argue it is lust that makes gold so attractive to human beings, this piece shows that it is its special characteristics that give to gold its true intrinsic value. In economic terms, at least, if not psychologically.
The story of gold is neither new nor finished. It takes us back to World War 1 when the gold standard was suspended and after which it became crucial to decide whether to stay with gold or leave it behind. It is interesting to look at the comments of Rudolf Steiner at that time, as also of the British economist, John Maynard Keynes.
In Beyond Gold, we first consider Rudolf Steiner’s commentary, extracts from lectures and Q&A sessions he gave in 1922. His essential answer is to abandon gold in favour of money-as-bookkeeping. Indeed, how much easier it is to balance the books by way of debit and credit columns than by trolleying gold from one vault to another, let alone shipping it, de Gaulle style, from one country to another!
Keynes’s ideas are the subject of Barbarous No More, an edited compilation of seminal statements that serve as a condensation of his central book, A Tract on Monetary Reform, published in 1923. This text is well-known in finance circles and crosses the supposed Friedman-Keynesian divide. As such, it is an essentially economic work that bears reading even now, when its message rings out loud and clear: We need to find a way to move from instinct to science in the conduct of our economic affairs.
The AEX Page features two comments recommending further reading. The latter pointing to an online article by Marc Desaules, the former helpfully highlighting a book included in the third section, the announcement of a new range of titles courtesy of a new model of publishing.
The issue is rounded off by Victor’s Blog on Golden Thinking, which further contextualises the problem of gold and compares the ideas of Steiner to those of Keynes. As far as is known, the two did not meet, though the existence of each must have been known to the other. Certainly, Steiner spoke about Keynes, especially remarking on the latter’s analysis of the effects of the Treaty of Versailles.