Why is the gold standard such a big deal to libertarians?

[I spent the winter writing songs about getting better]

I've never understood this or the reasoning, it's such a ridiculously fringe view I have no clue why such a big deal would be made about it from this crowd. No serious economist* or anyone of consequence favors it and really it's been backed by no one outside the fringe and some conspiracy theorist nutjobs (I'm thinking of LaRouche and co here for one.) So why has it become such a defining issue?

*OK fine Peter Schiff predicted the recession correctly. But he's also basically been doomsaying since the turn of the century and just finally became correct, not too dissimiliar to the Dem hacks who had good prediction records in 2006 and 2008 or the Republican hacks who did in 2010. And really, what he was saying largely amounted to "The real estate bubble will eventually pop."

[All Along The Watchtower]

Because it is "sound money" that isn't subject to high rates of inflation. It also severely limits a central banking system, which libertarians hate, and federal deficit spending (lack of inflation=higher real debt value) which libertarians also hate. This ties into libertarian hatred of all things federal, except an incredibly small, decentralized government I suppose.

[courts]

Because it is "sound money" that isn't subject to high rates of inflation. It also severely limits a central banking system, which libertarians hate. This ties into libertarian hatred of all things federal, except an incredibly small, decentralized government I suppose.

That and people should have a choice instead of being forced to accept something they feel has no intrinsic value which is sort of the whole point of the ideology. Gold is sort of passe even among libertarians though.. Now a lot of the focus is obviously on silver, which is a bit ironic.

(not claiming to be libertarian or endorsing a strict gold standard per se before the usual peanut gallery chimes in)

[Gustaf]

There are arguments for the gold standard, even if few modern economists consider them strong enough.

Basically, the system of the gold standard provides nominal stability, which libertarians seem to consider an important issue. It also, at least the way it was run back in the day, sort of prohibits trade deficits and fiscal deficits.

The key reason is probably that libertarians tend to have a very positive of late nineteenth century America, which had the gold standard.

The problem from an economic viewpoint is mostly that the gold standard seems to be a straitjacket whenever the economy takes a downturn, and the modern view tends to be that one should prioritize nominal instability to secure real stability.

[Filuwaúrdjan]

Just listen to them and it all makes sense, so to speak. It's because gold is shiny and 'special', and therefore real with a 'real' value, unlike nasty paper money which is backed up by the evil state.
Of course there are other arguments for the gold standard, but they don't seem come into it as far as most libertarians seem to be concerned.

[Roemerista]

Because it would supposidly restrict the Federal Government's ability to manipulate currency in an unconstrained manner, is how the story goes as I have heard it.

[Bacon King]

hey guys we should be on the gold standard, becuz gold sure is sound and stable lol!

oh wait--

[dead0man]

Or maybe it's not that big of a deal amongst most libetarians.

[tpfkaw]

The libertarian position is that there ought to be free competition in currency, not a mandatory bank-owned completely unaccountable wealth-redistribution system for the ultra-rich, wherein anyone who provides a quality alternative product is labeled a felon and a "domestic terrorist."

hey guys we should be on the gold standard, becuz gold sure is sound and stable lol!

oh wait--

Price =/= value.  Price is the amount of Federal Reserve Notes (or pounds sterling or euros or rubles or whatever) required to purchase one unit of value.  Value is the expected satisfaction obtainable from a product or service.  Your image proves that the price of gold in Federal Reserve Notes has increased (i.e. the dollar has inflated relative to gold), it says nothing about the value of gold (which could be determined by comparing the ratio of the price of gold to the price of other objects at various points).

[MyRescueKittehRocks]

Even the Bible advocates hard commodity money. Mike Pence came out in favor of it

[Bacon King]

Your image proves that the price of gold in Federal Reserve Notes has increased (i.e. the dollar has inflated relative to gold), it says nothing about the value of gold

Okay, well chart number two:



Even when adjusting for the inflation of the US dollar, you can see that the price/value/whatever of gold isn't really identifiable at all, and in fact its historical volatility gets even worse.

(which could be determined by comparing the ratio of the price of gold to the price of other objects at various points).

But okay, sure.

http://www.financialsense.com/contributors/ronald-griess/ratio-charts-gold-versus-other-assets

Yes, more big annoying charts. But even when comparing the price of gold to the price of other materials, do ya see any consistency between the ratios from which one can determine gold's absolute "value"? Of course not! Gold doesn't magically somehow have a value/cost any more stable than any other type of thing. The idea that money "should" be backed by gold, as opposed to any other sort of thing, is entirely arbitrary.

[tpfkaw]

I don't support the gold standard, I'm just pointing out that the price of gold is not an indicator of its value.

[Associate Justice PiT]

I don't support the gold standard, I'm just pointing out that the price of gold is not an indicator of its value.

     I agree, & I would add that chart two seems slightly pointless to me, seeing as how it begins at essentially the point where we get off of the gold standard. We have had decades of a gold standard in action in the past, so we might as well examine the data from that period to draw our conclusions.

[opebo]

It is a kind of fantasy based upon a misunderstanding of both the State and 'economics'.  A similar fantasy might be for a kind of robotic, impartial brain to replace the 'man with the gun' or even 'society' in general. 

Really their fantasies are quite ridiculous to non-believers.

[True Federalist (진정한 연방 주의자)]

The primary advantage of the gold standard from a libertarian viewpoint is that in theory, the government can't manipulate the value of money.  Of course, to achieve that theoretical ideal, you have to also eliminate all banks and destroy the modern economic system, but that doesn't bother the purists.  Either they ignore that pesky detail or actually welcome it.

[John Dibble]

The primary advantage of the gold standard from a libertarian viewpoint is that in theory, the government can't manipulate the value of money.  Of course, to achieve that theoretical ideal, you have to also eliminate all banks and destroy the modern economic system, but that doesn't bother the purists.  Either they ignore that pesky detail or actually welcome it.

Strangely enough this reminded me of something I read recently - there's a bit of Harry Potter fanfiction that was recommended to me called "Harry Potter and the Methods of Rationality" exploring the idea of Harry having been raised by an Oxford professor rather than an incompetent buffoon who would name his first child Dudley. I figured I'll share to see if anyone gets a laugh out of it:

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[True Federalist (진정한 연방 주의자)]

Enjoyed the story, but the following post treats it seriously.

Since gold is almost twice as dense as silver, then with the gold coins being larger, it appears that in the wizard world the ratio is about 8:1, a ratio that never happened in the history of coinage.

However, if these coins are indeed pure metal, then perhaps there is a refining fee Harry Potter-Evans-Verres would need to pay as well.  Muggle coinage is not pure, partly because of difficulty, but also because pure gold and silver aren't very durable.  It could well be that silver is more difficult to reach the wizardly standard of purity.

However, I doubt that anywhere in the Potter books is the free coinage of silver or bronze is mentioned.  The ratios in the books are while atypical, not inconsistent with the wizard world being on a gold standard, not a bimetallic or trimetallic standard, with the silver Sickles and bronze Knuts being worth what they are worth because because Gringotts says they are.

Not only that, but the fact that they bother with serial numbers on the gold Galleons suggest that they could be a form of fiat currency for the wizards, with Gringotts serving as the wizardly equivalent of the Bank of England.  After all, with transmutation possible, the gold supply need not remain fixed.