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To be honest, people are saying that we should have never abandoned the gold standard, which is a bit more nuanced.

>The gold standard is effectively no policy because it gives control of the money supply over to control of the gold supply.

Hayek (he too had an econ degree I believe) could argue that advocating for the gold standard isn't necessarily advocating for "no policy." It is advocating for a different kind of policy, one that places more trust in market mechanisms rather than central planning.

>Advocate for better policy.

No matter how good of a policy you have for predicting Roulette numbers, your policy will be just as good as choosing at random, and most likely worse. Hayek would argue that there was a "knowledge problem" and no amount of econ degrees can solve it.

> Hayek (he too had an econ degree I believe)...

I don't think Hayek had an economics degree, but in 1974 he did earn the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel:

https://www.nobelprize.org/prizes/economic-sciences/1974/hay...

I checked: his doctorates were in law and political science, with his undergraduate background consisting of a combination of philosophy, psychology, and economics.

>Hayek (he too had an econ degree I believe) could argue that advocating for the gold standard isn't necessarily advocating for "no policy." It is advocating for a different kind of policy, one that places more trust in market mechanisms rather than central planning.

Yes, this was why I said "effectively no policy" and compared it to removing regulation in the wake of 2008. It isn't literally "no policy" in the same way that anarchy is still technically a governing philosophy. But it is still effectively the same as no policy by taking a laissez-faire approach.

>No matter how good of a policy you have for predicting Roulette numbers, your policy will be just as good as choosing at random, and most likely worse. Hayek would argue that there was a "knowledge problem" and no amount of econ degrees can solve it.

This is what I described as defeatist. The economy isn't roulette. In roulette, it is impossible to observe, react, and predict. I don't believe that is true of the economy. It seems borderline silly to suggest we can't observe an economic trend and react to it.

> It seems borderline silly to suggest we can't observe an economic trend and react to it.

Oh, yeah, we can react. The same way you start betting on red after you see 3 reds in a row.

Trends don't happen in roulette. Each round is independent (assuming the equipment is properly calibrated and there isn't any cheating).

That isn't true with the economy. For example, unemployment numbers in one month are strongly correlated with the numbers in both the previous and next month. This is obvious just looking at a graph of the unemployment rate[1]. I can say with a high level of confidence that the rate for September will be in the 3.5%-4% range because it has been that way since 2022. Can you honestly look at that data and tell me it is as random as roulette?

[1] - https://www.bls.gov/charts/employment-situation/civilian-une...

I'm doing a terrible job at trying to communicate the Austrian School of thought, apologies. But if you are really interested in the matter I would suggest reading Hayek, or any other Austrian.

These couple of articles are a good starting point:

- https://en.wikipedia.org/wiki/Economic_calculation_problem

- https://en.wikipedia.org/wiki/Austrian_school_of_economics

Hayek's doctorates were in law and political science. He had studied economics but did not receive a PhD in it.

<https://en.wikipedia.org/wiki/Friedrich_Hayek>

The gold standard does make prices depend on gold supply, but that is roughly 2% inflation (3kt mine supply over gold stock of ~150kt).

That is roughly in line with BTC inflation at the moment, and also, as it happens, central bank inflation targets (expectations of anything more would lead people to buy gold, or BTC, or just warehouse cash).

However, the real discipline of a gold standard is to restrict debt (credit). The market for lenders and borrowers (investors) sets the (Wicksellian) interest rate, as any market should.

Governments cannot just print money to run indefinite deficits, to curry favor with the electorate. The democratic desire for low taxes and infinite subsidies cannot be consumated. There has to be fiscal discipline. That is the value of the gold standard.

You seem to be mixing inflation of the money supply with inflation of the value of money. There is strong causality there, but it isn't the only cause. Considering the money supply is the primary cause we have control over, going back to the gold standard creates greater risk of other causes like supply or demand shocks harming the economy as we would no longer be able to nudge inflation in the desired direction to counteract those other causes.

And if the primary remaining benefit of the gold standard is to rein in government spending, I would simply argue there are other ways to do that. It seems like throwing the baby out with the bath water to give up control of monetary policy in order to better control fiscal policy.

> As someone with an econ degree, people advocating for a return to the gold standard are so weird to me. I totally understand people having objections to how central banks manage the money supply and the impacts that has on the economy, but that doesn't mean we should give up control of it completely.

I think you're probably thinking about it wrong. It's not a conventional policy proposal. I think the main factor is just naked mistrust of people like you (people with an econ degree, etc), leading people to seek out simple solutions you have no control over.

Another factor is people just getting high on pure ideology, and losing interest in solving actual problems in the pursuit of that ideology.

I probably wouldn't recommend switching to the gold standard but I don't think the idea is "weird" or "no policy".

- People ran productive economies for hundreds (thousands?) of years on the Gold standard and it worked.

- It's credibly neutral and no one gets the exorbitant privilege of printing money.

- The supply expands randomly when new deposits are found but this actually works pretty well. As the economy grows we get better at finding gold so prices stay relatively flat in real terms.

- On a gold standard people will waste real resources trying to extract gold to sit in a vault but people waste real resources trying to get printed money too.

Say what you will about fiat, people haven't started wars of conquest to expand the maximum size of their economy because of it. Defining that as "waste of resources" is a massive underestimate.

> - People ran productive economies for hundreds (thousands?) of years on the Gold standard and it worked.

The Gold Standard (paper currency backed up rocks) only started in 1870. While gold (and silver) coins were used for some monetary needs, most (local) economies actually ran on credit:

* https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

> - The supply expands randomly when new deposits are found but this actually works pretty well. As the economy grows we get better at finding gold so prices stay relatively flat in real terms.

No it does not:

* https://en.wikipedia.org/wiki/Great_Bullion_Famine

Neither does it add to financial stability:

* https://www.theatlantic.com/business/archive/2012/08/why-the...

* https://archive.ph/FWKcL

> As someone with an econ degree, people advocating for a return to the gold standard are so weird to me

I mean, I understand. People really like simple things they can understand. And people hate inflation. It's clearly a bad idea, but I understand the appeal if you were raised in a blue-collar household and think debt is evil.

Why does the Fed set interest rates (aka the price of money)?

Because it can?

Because it should?

Why does the Fed not fix the price of bread?