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I believe that is a widely misunderstood conception of the origin of money. Gold has generally not been used as currency. The sovereign right to dictate the value of a coin struck in a metal is called "seigniorage", and exists for all of those 3000 years. The value of the currency comes from the demand for it by the government to pay taxes, not the value of the metal in the coin. The metal in the coin makes it expensive to counterfeit said coin, with punishment by death doing the rest of the disincentive.

There is a reason the coins have the emperor's face on them. They are what he will accept as payment for the taxes he requests, and in assessing taxes according to his power, he dictates their value by fiat.

> The value of the currency comes from the demand for it by the government to pay taxes, not the value of the metal in the coin.

That's the fantasy, not the reality.

> The metal in the coin makes it expensive to counterfeit said coin, with punishment by death doing the rest of the disincentive.

What actually happens is the government declares a dollar value for the coin, and then alloys the gold with cheaper metals. This results in inflation. The usual content of counterfeit gold coins is less than the gold in the government issue, which is where the death threat comes in.

Only one counterfeiter ever put more gold in the coin than the government, that was Baraha. The government got mad at him because a Baraha sovereign was worth more than the government issue.

> he dictates their value by fiat

Governments always try that, and it never works. Governments are always alloying the precious metal with cheaper metal, but nobody is fooled, and the result is inflation.

Why do you think the government no longer issues gold coins? why there's no silver in a dime anymore?

Inflation.

>Why do you think the government no longer issues gold coins?

Because it became self evident in the 1800s and first half of the 20th century that a commodity backed currently is not a good idea in any non static economy with a reasonably stable government?

Deflation and constant boom and bust cycles (something like the 2008 crisis would have been pretty mild back in the gold standard days) are somewhat of a drag on economic productivity.

Just because the gold standard had flaws doesn’t mean the fiat system that replaced it is flawless or even better. There are tradeoffs involved in both systems.

In a fiat currency system there is no meaningful constraint on the supply of money. We’re experiencing the effects of that feature of the fiat system currently. Tying the supply of money to a rare commodity like gold may create other problems, but it completely solves the issue of currency devaluation.

For the record, the world was on the gold standard when the agricultural and industrial revolutions occurred. It’s not at all obvious to me that the gold standard prevents productivity growth.

The trade off equation has been: some inflation, in return for much larger economic growth & fewer less devastating crashes. Seems to have been a good trade so far.

I disagree: https://wtfhappenedin1971.com/

https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfh...

> The value of the currency comes from the demand for it by the government to pay taxes, not the value of the metal in the coin.

History has plenty of examples of governments debasing their coinage and resulting drops in those coins values.

Much of the 3,000 years of history you're referring to saw precious metals used as wealth storage primarily in the form of objects like jewelry, silverware, and candlesticks. All of which have sales taxes.

The question I'm asking is why it's unreasonable that bullion that we've agreed isn't currency isn't being treated differently than these other things?

A fork is a finished consumer product. Even if it's made of silver, you can use it to eat with.

Bullion isn't a finished consumer product, it's the packaging format for the raw material.

Sales tax applies to finished consumer products. The intermediary stages are traditionally exempt, i.e. the person who buys bullion in order to make silver forks doesn't pay sales tax, the person who buys the fork does.

Craft stores still add sales tax to raw material. Costco charges sales taxes to business accounts, unless given a certificate of resale or buying from an exempt category in whatever state. I could go on, but clearly sales taxes apply to more than "just" finished consumer products. They apply pretty broadly to retail sales as a whole.

It's at least a distinction though, unlike the other arguments.

Sales taxes is a much more modern invention not 3000. Gold was money and still is in freer jurisdictions

> Whereas to me, it's wild that thousands of years of gold bullion trade as a form of currency exchange is supplanted basically overnight and now only "gold but only on paper" would be considered the only form of real gold currency.

I mean, it's not a coincidence. For example, the US government has laws against using gold as currency, and they take those laws seriously and enforce them with vigor. They don't want dollars to suffer the competition.

Given the laws, it is necessarily the case, by definition, that gold is not currency.

> the US government has laws against using gold as currency

I don't think that's true, or I can't find any evidence of it. If you want to buy a car and the seller agrees to accept 50 gold coins instead of $100,000 cash, that is perfectly legal. Hell, the US makes currency out of pure gold that are currency at face values of $5-50 (but the gold in the coins is worth 100x more than the face value).

Are you talking about the Gold Reserve Act of 1934 and Executive Order 6102? That banned private ownership of gold and demanded that citizens turn in their gold. But it was lifted in 1974.

> If you want to buy a car and the seller agrees to accept 50 gold coins instead of $100,000 cash, that is perfectly legal.

You're free to barter in general. 50 gold coins, though, would probably be illegal even though 50 marble statues is fine.

https://www.law.cornell.edu/uscode/text/18/486

Using gold (or any metal) as currency ["current money"] is specifically illegal if the metal is coined.

You'd need to establish that it never crossed the seller's mind that he might later exchange those coins for something else. As an isolated incident, you'll have a fairly strong defense. If there's been another transaction in gold coins in your area recently enough that either of you might have known about it, you won't.

How do goldbacks fit into this? They contain gold (up to 3 grams, a non-trivial amount), they are accepted by a (small) number of businesses, and they are supposed to be reused for further transactions.

If you were prosecuted under 18 USC §486 for manufacturing or spending goldbacks, you'd presumably be relying on the argument that, while they are gold intended for use as current money, they aren't "coins".

> the US government has laws against using gold as currency, and they take those laws seriously and enforce them with vigor

This is nonsense. If you'd like, you can absolutely sell your house for gold bullion. (Or Japanese yen or bails of peanuts.)