One of my long-running frustrations with libertarian thought is the idolization of gold (and to a lesser extent, silver). I could be wrong and there is substantial merit to the argument. I just don’t think so. All currency is relative. During a famine, would you accept gold for a loaf of bread? A loaf of bread for gold? The answer is different, right?
Megan McArdle posted about this last week:
“Hard money” types tend to denigrate the dollar as little green pieces of paper, not a real thing that’s actually worth something. This seems to me like a version of the Marxist fallacy, the belief that value can be somehow intrinsic rather than relative. Gold is pretty, of course, but not actually much more “useful” than a dollar bill. It does have some industrial application, but the vast majority of the gold in the world is used for money or jewelry.
A dollar is a real thing: a store of value and a medium of exchange. These are extraordinary valuable uses. Indeed, the need is so great that if currency is restricted or unavailable, people do not simply revert to barter; they turn something into a currency.
She continues, leading to a story about prisoners using canned mackerel as currency. We can, and probably should, complain loudly about fiat currency, if only to encourage and force more responsibility and less maniuplation by the government. But fetishizing gold misses the point. The point that gold has an extra application is most irrelevant because most people are not interested in bartering with organizations interested in gold’s industrial applications. Gold has value for the same reason a dollar isn’t a mere piece of ink-stained paper: someone else values it.
That is real, but it is also subjective. Argue for gold. Argue against fiat. Just remember that they are separate issues.