Don’t be patronizing. I know far more history than you might imagine. I also know about economic history and the origins of modern economics in eighteenth century Enlightenment thought–and its relation to a host of other developing sciences, including, might I add, the crisis of both rationalism and empiricism.

A society cannot evolve if its foundations are rotten, mainly because price, which is the only possible way to measure output and input value, is completely distorted due to inflation of credit and currency.

Rome collapsed into hyperinflation. Hitler raised to power after hyperinflation. Most of the major events in our history find their source into economic reasons.

The one point I will make though in response to your last post is that to credit the gold standard with the rise of the West is specious historically at best. In order to establish that, the first thing you’d have to do is compare it to other societies and cultures that didn’t rise.

If I recall my history, a lot of the dominance of the West had to do with science–you know, the printing press, galileo, invention. Those are not a function of a currency standard. Why would you privilege economics as a determining field over other historical causes, such as most simply, geography, population, etc.?

Paul doesn’t understand the function of a store of value. Value represents labor, or knowledge or food or energy, something that people desire and are willing to exchange assets or services for. A store of value allows savings, and savings are necessary for investment. Without investment, there is no progress. Therefore, the best store of value best fosters progress. Witness a little era called the industrial revolution, when a dollar was a dollar and a pound was a pound, and western civilization made its greatest strides.

Sorry, I think you believe that Gold is an objectively valuable thing. Yet value, just like beauty, is in the eye of the beholder. In other words, value is a function of exchange, and the expression of that function is some kind of contractual assertation of value–i.e. a price. Gold is valued in dollars. Dollars are not valued in Gold. Even the most strident gold bug will argue that its value will go up as expressed in a paper currency. And, in the end, in order to use it, you have to exchange it back into that paper currency.

Another way to think about this is that when you buy stock, you buy a claim on profits. What do you buy with gold? “Value.” Sorry, but that sounds like mysticism to me.

Also look at how little people were paid 2000 years ago: a Denarius a day was a standard wage in Rome. That is about 4.5 grams of silver, if I recall, worth about $2 today. Yet that was enough to feed a small family back then.

Also, in the Depression, the fact that the price was fixed at $20 was enough to increase margins because labor, equipment, transportation and fuel costs fell dramatically. Companies with mines that had been economical in the 1920s absolutely cleaned up in the ’30s, even before the fix was raised.