There are many ways that one might arrive at the opinion that gold is obsolete as the governor on the creation of money. One such way would be to have lived through a deflationary period caused by gold-induced brake-slamming during a time that should have seen exceptional growth because of new technology adoption. In particular one need not get there by proceeding toward utopia from the head of a pin. That may be the only way that you can deduce, but there are others, such as the one I described. Having reached a conclusion that gold is obsolete for the purpose of governing a money supply, the question then becomes, "What takes its place as the thing which prevents kings and politicians from burying us in funny-money?" There are innumerable answers to that question, but certainly one of them is some collection of Wise Men(tm) who just plain guess as to how much money there ought to be, with their guesses predicated on various price signals like interest rates and so on. This process is really no different than the one that the board of wise men who run gold mining companies use to decide when to mine at a higher rate, or when to invest in a new mine, or a bigger mine. No matter how it gets arranged, there will be humans in there making mistakes all along the way. I know of no reason to believe that the sort of humans who run gold mining companies are any smarter than the humans we have on the Federal Reserve Board of Governors. The only differences I see are that (1) gold operates like a ratchet, in the sense that once mined, gold can't be unmined; and (2) the Federal Reserve can increase credit a lot more quickly than the Homestake Mining Company can find a new deposit and bring it into production, and that time span difference can be critical if the economy is trying to grow rapidly. I don't think that "liberalism" has much to do with the choice. It's pretty much a practical thing of how we go about providing a convenient medium of exchange so that we can conduct economic activity expeditiously. Money is sort of like electricity in the sense that 99% of us want to go about our business without worrying about how the electricity is made, whether by coal or nuclear. There are people who want to turn that decision into an ideological crusade, but most of us don't care and dismiss such people as cranks. "But it's nuclear! It will surely blow up! Radiation! Booga! Booga!" To which, I think the right answer is, "Oh, shut up." That's my opinion. |
That reply amounts to saying that you reserve the right to arbitrarily label any opinion that you don't like as "liberal," and therefore deficient. It's a glorious form of namecalling, but namecalling nevertheless.