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Comment by Finnucane | Hacker News Reader

When gold was money, most people were poor. Gold was mainly good for the aristocracy.

Wealth generation has been growing exponentially for 200, 300 years. Maybe longer. Noting that people in the past had less wealth than today is hardly a point. Anything but the most jaw-droppingly stupid economic systems would have todays population being very wealthy compared to those of yesteryear. Even the experiments in authoritarianism and communism have managed that although they killed a lot of people along the way.

And I find it a bit of an eye roll that the minute the gold standard comes up all the "inequality is out of control now!" people fade into the background and the "back then, everyone was poor except the wealthy" arguments come to the fore. There is an inconsistency in the hive mind. This is a system where we print money and give it to the asset owners. It is visibly stupid.

but that doesn't really answer the question of why a gold stabndard is better. The gold standard didn't make the industrial revolution happen. And the gold 'standard' was arbitrary itself, and the government could alter it at will. It was just as 'fiat' as anything.

I agree with the thrust of your argument but the idea that you need to have a really really large pile of gold sitting in a warehouse to fix it seems silly to me.

Can't they just not print so much?

That was more or less what Paul Volcker did in the early 1980s. Banks were smaller and more closely regulated, so he was able to put some constraint on the money supply, and raised interest rates. And it worked, it crushed inflation, but it was a very bitter pill--a hard recession followed. Volcker got yelled at by Congress, a lot. In the long run, he was vindicated--inflation remained fairly low until the pandemic.

But the idea that you should manage your economy according to how much of some metal you can dig out of the ground is ridiculous.

Have to find a way to measure long term quality of life. Digging in the ground should be part of it. If you can forge quality long term mutually beneficial relationships with others who agree to do the digging for you it might score more points than digging yourself.

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