The Ridiculousness Of Demanding Government Return To A Gold Standard

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The Ridiculousness Of Demanding Government Return To A Gold Standard

By Michael Suede

June 28, 2011

Why in the world are libertarians running around demanding government return to a gold standard? I have a couple of questions for libertarian goldbugs in the Ron Paul camp.

What possible motivations would government ever have for doing so?
What makes anarchists think the government would ever listen to their pleas?

The answer to the first question is obvious – it has none; therefore, it will never return to a 100% reserve gold standard. It will simply never happen. No amount of protesting, cajoling, rioting, etc.. etc.. will ever make the government return to a gold standard. Historically speaking, a return to gold is only precipitated by the total destruction of the preceding fiat monetary system. Markets can force a return to gold, but government never willingly returns to a gold standard of its own accord.

The second question is really why I’m writing this article.

By now it should be obvious to everyone, even to people who aren’t libertarians, that government never does anything that is in the best interest of the public at large. It only serves selective special interest groups that are composed of various voting blocks.

For example, social security is robbing the youth of the nation blind while funneling all of the stolen booty into the pockets of old people who happen make up the richest age demographic in the nation. Social security doesn’t help the old and young, it only helps the old at the expense of the young. Old people vote more often than young people so they constitute a special group of people that government looters pay attention to.

Since a government mandated return to a gold standard would “injure” more special interest groups than it would serve by way of providing a stable medium of exchange, is it not simply a massive waste of time and resources trying to get the government to institute a gold standard?

Let me put this another way – Is not demanding that congress abolish the Fed and return to gold the same as demanding that the Bonnano family abolish the Italian Mafia?

Could it happen? I suppose it could happen; in the same way I could win the mega-bucks lotto.

Given that I feel the above facts are indeed facts and not opinions, it would seem to me that the proper way for libertarians to go about bringing a return to sound money is to simply start transacting in one. If all the libertarians (which I figure make up around 10% of the US population) simply decided that they are going to start using and accepting gold as a currency in their daily transactions, it would rapidly undermine the official fraudulent currency.

This solution seems obvious to me, so why aren’t the goldbugs doing this?

What’s that?

Did I just hear you say that people have tried to create their own gold backed currency, like the Liberty Dollar, which resulted in them being attacked and looted by the Feds?

Did I just hear you say that gold is simply too difficult to use a direct medium of exchange because you can’t physically divide it up as you stand in line at the checkout counter?

Did I just hear you say that you can’t use gold for internet transactions because you can’t shove gold down an internet cable?

Did I just hear you say that as soon as you start representing gold with tokens or paper that those things suddenly become the target of counterfeiting, fraud, and a plethora of government regulatory attacks because they fall under Federal Securities regulations?

Did I just hear you say that gold backed private currencies constitute a centralized issuing authority that can be arbitrarily shut down by government or that the private issuing body could issue more notes than they actually have in specie?

Of course, you are absolutely correct on all counts, which is why people aren’t transacting in private gold backed currencies today. I have to thank you, because you just made all of my arguments against the gold standard for me.

Hmmmmm…… so what is a libertarian to do? I think most libertarians have come to accept the reality that laws do not actually solve any given problem within a society. At best, they simply act as a band-aid or punishment to deter crime. Murder laws do not solve the problem of murder. Rape laws do not solve the problem of rape. And government currency laws don’t actually help make the general population richer.

Only the industrious use of technology can actually solve complex social problems. It is for this reason that one must remain open and alert for new technologies that can address the issues with gold that you just laid out for us.

It has really struck me that while libertarians make much hullabaloo about returning to a gold standard, they aren’t really interested in returning to a market driven gold standard. They are only really concerned with with returning to a government mandated or granted gold standard, which is an utter pipe-dream.

Running around stamping your feet demanding government return to a gold standard or that government allow private mints to issue their own private currency is like demanding the mob stop robbing people. IT WILL NEVER HAPPEN. There is only one way to affect the social change you desire, and that is by finding a way to address the issues that are preventing gold’s use as a private barter currency today through technological innovations.

What if I told you a global decentralized currency exists today that is not subject to any of the above burdens, while still retaining all of the monetary properties of gold? Would you be interested in learning more about this currency – or would you dismiss it out of hand because it’s simply not gold?

Didn’t you just finish dismissing the gold standard in the above arguments? I just can’t win with you people!

The reality is gold can not become a currency of the resistance. It just can’t. It is too difficult to spend, too easy to confiscate, and too easy to control. The only way to undermine the current tyrannical regime is to create a currency that is better than gold. The only way to topple the regime is by taking its ability to confiscate resources away from it through technological innovation. Only through technological innovations that eliminate the problems with a gold backed currency can real change be effected.

Most importantly, libertarians must accept that gold is flawed. They have to look at the arguments laid out above and really digest the fact that gold just isn’t going to cut it. They have to acknowledge that the physical limitations of gold combined with the violence of the State act in concert with each other to prevent its return to the markets.

There is only one currency in existence today that evades all of the problems with gold while retaining all of the benefits of a commodity currency – and that currency is Bitcoins.

Let us not forget that we should ultimately not want a commodity backed currency, we should want a commodity to be the currency itself. Backing a currency implies that some issuing body is responsible for auditing the issue of whatever is representing the underlying commodity. History has taught us this way of thinking is folly.

So this is my plea to you, my dear voluntarists, stop demanding government effect change through laws and start effecting change on your own by seeking out technological innovations that undermine the State’s ability to rob people.

I’m not going to proclaim that Bitcoins are the panacea to the problems of gold, but I am going to proclaim that if it is not Bitcoins, then it is another flavor of electronic currency that operates on the exact same principles as Bitcoin. Only a decentralized, peer-to-peer, unreproducible, anonymous, and secure electronic commodity can solve the problems that gold fails to address.

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