Money was always a “construct.” Value is assigned by people based on trust.
In the 1990s I attended a round table Liberty Fund symposium with, perhaps, five or six leading Libertarian economists to discuss the book by Leland Yeager called “The Fluttering Veil” about a return to the gold standard.
Realize, these were people totally in favor of gold.
After three days not one of them could offer a system backed by anything that would even remotely work. They tried gold, platinum, market basket of goods, etc. Even today’s “bitcoin” is NOT working as intended, which was a medium of exchange, but instead is like a rare painting, simply a store of value. For how long? Only as long as people have faith in it.
VDH is not appreciating the phenomenal and radical transformation of the world economy caused by computers. Beginning in the 1990s, we went into a real deflation. This was hard to see because it was entirely based on computer value-added and slave-labor from China/Mexico driving real prices down, while values soared.
Recently I saw an article on entropyeconomics.com where the guy valued a 2020 iPhone based on what it would cost to make it in 1990. Between $51,000 and $51 million. I don’t doubt it. No one, anywhere, has come close to accurately valuing our tech.
Then there are the deficits. Well, are there? In the 1980s, economist Robert Eisner discovered that America’s stated debt undervalues the US assets by trillions because, by law, those assets are valued in the dollars of the YEAR PURCHASED. Our gold supply alone was worth several thousand percent more; American land was worth trillions more, none of it captured on the balance sheets.
Then there is this: Economist Robert Gordon in “Rise and Fall of American Growth” that the CPI and asset valuations of the late 1800s early 1900s were not just off, but WAY off because they took a static view of goods & services. A candle light was measured against a light bulb solely in cost. But when measuring QUALITY (lumins) and quality of life (massive decline in fires due to kerosene), the GDP was way off.
I know an author that has been pushing deflation for a long time. Never really believed it. Still don’t
But I am an engineer. My equations have to balance. Economics doesn’t