A Return to Stable Money Requires More Intellectual Gasoline

October 4, 2012

(This item originally appeared in Forbes.com on October 4, 2012.)


This year, I’ve been making an effort to meet personally with a number of people who have been prominent advocates of a stable-money policy in the U.S – instead of the funny-money policy we have today. After all, this was the way we did things in this country for nearly two centuries, until 1971. It’s the American Way.

One theme I have heard several times is that we need more broad-based support, more media exposure and, especially, some political champions to make it happen here in the U.S. It seems like nobody except Ron Paul wants to carry that flag. (Note to Congresspeople: Ron Paul keeps getting re-elected year after year.)

But, I don’t see things that way.

What I see is: quite a lot of broad-based support, among the voting public, centering mostly on the Tea Party types. I see a lot more support than one would normally see for a topic which has been “so unpopular.” The regular voting public has always known what’s what, even if they are not able to easily express it. They know that funny money isn’t in their long-term benefit. It never has been, in any culture or civilization over millennia of time.

I also see – although some would disagree – a core group of libertarian-leaning Congresspeople and others who are, actually, ready to carry the football into the endzone.

What I don’t see is: the football.

Politicians aren’t supposed to be intellectuals. (Even if they are, in fact, intellectuals.) They are representatives of broadly-held desires and beliefs. They stand at the front of the crowd, you could say, or at the peak of a pyramid. They need something to stand upon, a “political platform,” which consists of specific ideas and popular support.

What I see today is the need for a lot more material from the intellectuals. Basically, this means books. Books – not opeds, not speeches, not magazine articles – are the way we traditionally express ideas in detail. This doesn’t mean that the other stuff isn’t also important. It is. But you need books. The other forms of communication serve, often, as ways to encourage people to learn more about a subject – from a book – or to comment on ideas – explained in detail in a book – or to relate current events to ideas … found in a book.

And, they can’t be silly books full of nonsense. There is, unfortunately, a whole lot of nonsense written about gold standard systems these days, including university textbooks on economics.

The United States did not become a world superpower with a nonsense monetary policy.

In the little world of gold standard advocacy in the English language, most of the books date from the 1960s and 1970s. Despite their merits, they are also, in my opinion, filled with error. This isn’t going to do the job.

That’s why I took several years myself and wrote a book, Gold: the Once and Future Money. There was no other book out there that I could point to and say: “Here, read this.”

There’s a lot of material in that book – it has about twice as many words as publishers recommend – but there is a lot more still to say, on many topics. That’s why I also have a website, with hundreds of thousands of words of additional text and hundreds of charts and graphs.

But one book – and one author – is not enough. This is politics, and politics requires consensus. We will need a core group of intellectuals, who agree on enough points that a consensus forms that will serve as part of a political “platform.” And, these intellectuals need to write books, so that other people can see what they think.

Too much is done today on the oral tradition. That is, literally, what it is. In this post-Gutenberg age, we have some better alternatives.

Thus, we need what I call the “shelf of books,” from different authors. It doesn’t have to be a big shelf. About twelve good books, recently written, would be enough.

They can’t be old books and they can’t be books filled with economic fallacy.

I encouraged a friend at a mainstream conservative think tank to write up one of their detailed policy papers on how they would recommend setting up a new gold standard system in the U.S. They have detailed policy papers on healthcare reform, social security reform and tax reform, so why not monetary reform? Or do they think the present system is so close to perfection that it cannot be improved? These are smart people, and if they spent some time with it, they would sift out the nonsense and probably come up with a good solution. This does not have to be a declaration of political support. It could be done on a “contingency basis,” the way the military makes plans for things that it feels are unlikely, but not impossible.

The American Principles Project, which I call the “Tea Party’s think tank,” has just released two white papers about monetary reform. Read and discuss! That’s how it’s supposed to work.

Lewis Lehrman has just finished his most recent book on the topic, which was available in short-format form last year. [] That makes two books on our shelf. Great.

I hear that George Gilder, who released the influential Wealth and Poverty in 1981, has gained a growing appreciation for the importance of monetary reform. Maybe Gilder will put his excellent research and communication skills to work and produce a new work on the topic.

How about Alan Greenspan? Throughout his debates with Ron Paul in the 1990s, he hinted that he remained a closet gold standard advocate. With nothing to lose now, perhaps Greenspan might tell us what he really thinks.

Greenspan has many critics, for good reason. However, I think many do not appreciate that the dollar’s value was about the same, vs. gold, at the end of his 18-year tenure as it was at the beginning. Not a coincidence.

If anything, I find that the people who embrace this topic most wholeheartedly are younger people. Ron Paul reports that university students will, with no prompting on his part, begin chanting “End the Fed” when he turns up. Is there someone in their twenties who might want to expand that idea beyond three words? I’m surprised that university students even know what “the Fed” is.

Generation X and Y may have noticed that their elders have made a mess of quite a few things, and our monetary system is no exception. And – they may have noticed – their elders are not so good at fixing it either. So figure it out. You can do it.

I did it.

When we have that “shelf of books,” the broad public support base will be able to point to the shelf of books and say “I agree with that.” The media will respond because the formation of an identifiable broad consensus is now “news.” Then, a politician will sense that they have both the intellectual support and grassroots political support to carry a policy position forward. At that point – not before! — they will do so. (Ron Paul and Jack Kemp were exceptions, because they were intellectuals themselves.)

We’ve done this before. In 1879, the U.S. went to a gold standard system after 19 years of floating currencies. In 1821, Britain went to a gold standard system after 23 years of floating currencies. In 1944, most of the world went to an official gold standard system after various unsuccessful experiments during the 1930s. In 1949-50, Germany, China and Japan all went to a gold standard system after hyperinflation in all three countries.

We will do it again. It’s not that complicated. But, the process would be accelerated considerably if we had the intellectual gasoline that the political mechanism requires, to operate at full power.