Post
Topic
Board Politics & Society
Re: The price of gas is still 20 cents, in 90% silver dimes.
by
ansible adams
on 14/08/2011, 03:59:11 UTC
I think there is a substantial amount of magical thinking that leads people to specifically value gold or silver, and advance justifications for those metals as currency standards after they've already made up their minds. If they were starting from their claimed justifications, and simply looking for durable, rare substances whose production is limited and cannot be rapidly increased, then I'd expect as many cries for the Selenium Standard as the Silver Standard.

There's nothing magical about it. Gold and silver have thousands of years of historically being accepted as money therefore it's likely to continue that way. Whenever the free market decides what it will use as money, it settles on gold and to a lesser degree, silver and other metals. That's what I'm more interested in, free market money, rather than any specific metal. Let the market decide. Historically, it's been gold. What's the point in trying to fight that? Just so you can seem sophisticated?

I'm a scientist, or at least I was until I discovered that employment writing software offers steadier and better pay. I was first interested in Bitcoin as a field experiment in economics. Later I realized that with wide enough adoption it could be a truly disruptive technology, due to its international reach and lack of central control. The deflationary nature of Bitcoin has never been especially important or interesting to me, but it seems to have attracted people who make wild, unsubstantiated claims about deflation, the nature of money, precious metals, and related topics. My bullshit detector goes off when someone makes a claim contrary to empirical evidence, without empirical evidence, or of such a nature that it cannot be tested. Examples of popular bullshit in this vein include "vaccines cause autism," "a truly free market will care for the destitute better than government," and "God created the universe 6000 years ago but doctored the evidence to make it look older."

In the United States it has been legal since 1977 to write contracts specifying payment in gold and it has been legal to acquire and keep any quantity of gold in any form since 1974. These changes reversed the 1934 Roosevelt order that outlawed private gold hoarding and gold clauses in contracts. Yet gold is still only storing a small fraction of US savings and enters into only a tiny fraction of contracts involving payment. If the market always "decides" gold is great, why don't cell phone contracts, insurance policies, mortgages, employment agreements, car leases, etc. specify payment in gold? It's legal right now and has been for 30+ years.

I'm not interested in promoting mercury or selenium as the basis for currencies, only poking holes in the stories told about gold and silver. I do it in the same spirit as Richard Feynman: "The first principle [of science] is that you must not fool yourself -- and you are the easiest person to fool." If I'm fooling myself I hope that gold/silver promoters will rise to the challenge and provide empirical evidence for the great stability of their metals. If I'm seeing clearly and others are being fooled, I hope that I can convince others to at least approach economics and economic theories with the same scientific, empirical mindset that we'd apply to chemistry or physics.