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Why gold is hated and ignored by the mainstream, but coveted in private

Brilliant piece by Gary North:

The arguments against gold all stem from one idea: that private property is insufficient to establish a reliable monetary system. All of the arguments, without exception, rely on one version or another of a rival idea: central governments must intervene in the market for gold and silver in order to provide a reliable monetary unit. When I say government, I also mean the government-licensed monopoly that we call the central bank.

All opponents of a gold coin standard adopt some version of the anti-free-market ideology. They may be free-market people in other areas of their thinking, but in the area of monetary policy, they do not trust the free market. They do not trust individuals who act in their own self-interest, and who establish voluntary contracts with other individuals.

This is certainly true of the monetarists. The monetarists, following the arguments of Milton Friedman, have always opposed the idea that individuals are sufficiently reliable, trustworthy, and knowledgeable to make their own decisions about what kinds of money are best for them.

The monetarists have always opposed the standard free-market argument that individuals who pursue their own self-interest are capable of making their own decisions. These monetarists also oppose the idea that the decisions of individuals relating to their choice of a monetary standard will produce, collectively, a reliable monetary system.

This hostility to free-market money is opposed to the official position of the monetarists with respect to other aspects of the market economy. Some of them believe in antitrust laws. Some of them do not. But all of them believe that the central bank, when backed up by the power of the Federal government, is the only reliable institution with respect to the establishment of the fundamental policies governing monetary policy. These people trust the central bankers.

When you find scholars who oppose the full gold coin standard, you can be certain that these men do not really believe in free market. They believe in it for some areas of the economy, but they do not believe in it with respect to the central institution of all economic decision-making in a modern economy: the money system. They believe in government, which means they believe in coercion. They believe that somebody with a badge and a gun has the right to stick that gun in the belly of a decision-maker and demand that this individual use the money provided by the central bank.

Because academic economists are overwhelmingly Keynesians, and because a minority are monetarists, they believe in the legitimacy and wisdom of people who carry badges and guns. They believe in coercion in the area monetary policy, and they recognize that gold is the greatest single threat to government coercion that there is.

Individuals make decisions day after day, in almost every area of their lives, by using money. They establish the rules of the game on their own authority. Most people will never think of getting their hands on a gun in order to fight the central government. But in their daily decision-making, in the free market, they establish their own authority over government activities by means of the monetary system.

Control over governments by people who have the right to make exchanges in terms of non-government, non-central bank monetary systems is a crucial control over government. This is because such control is constant. Using gold coins is not self-consciously a means of exercising control over government, but it functionally is control over government. It forces the government to restrict its spending and its taxing as no other single legal right possessed by citizens and non-citizens.

This is why the overwhelming opinion of the opinion-makers in the modern world is opposed to a full gold coin standard. The reason for this is that the overwhelming opinion of the opinion-makers is in favor of government power. The individuals who openly favor the establishment of a full gold coin standard are in opposition to the dominant outlook of the intellectual world

This is why the overwhelming opinion of the opinion-makers in the modern world is opposed to a full gold coin standard. The reason for this is that the overwhelming opinion of the opinion-makers is in favor of government power. The individuals who openly favor the establishment of a full gold coin standard are in opposition to the dominant outlook of the intellectual world.

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