It’s deja vu all over again!

Geoffrey Lawrence

So says Doug French, formerly of Las Vegas, in his Mises Institute column today. French compares the current election year to 1980 in that discussion of the gold standard has actually crept back into the Republican policy debates.

While campaigning for the Republican nomination in 1980, Ronald Reagan promised to establish a gold commission once he got into office, just as Newt Gingrich has done in the current race. (Ron Paul has also urged a return to gold-backed monetary stability for decades.) Reagan at least nominally made good on this promise, although as the great Rothbard observed at the time: “The gold standard was the easiest pledge to dispose of. President Reagan appointed an allegedly impartial gold commission to study the problem – a commission overwhelmingly packed with lifelong opponents of gold. The commission presented its predictable report, and gold was quickly interred.”

French goes on to debunk the pseudo-intellectualism of some supposed monetary scholars who were recently quoted mocking the gold standard in the New York Times. Here’s my favorite retort: “A number of professors on the panel made comments to the effect that the price of gold is too volatile or unstable to back the dollar. Evidently it doesn’t occur to them that it’s not the price of gold that’s volatile but the value of the dollar. The value of the dollar is volatile downward for the very reason that the Fed can create dollars from nowhere; evidenced by the M2 money supply increasing from $683.7 billion in August 1971 to the current $9,712.8 billion.”

To be fair, I should point out that not all Austrians necessarily agree with the gold standard, even though they might all agree that a gold standard would be vastly superior to the current system of fiat monopoly currency and the attendant boom-and-bust cycle it facilitates. Hayek, for instance, simply advocated for free choice in currency, with the expectation that traders would naturally gravitate toward currencies that established a reputation for stability, whether backed by gold or not. This would imply a rejection of legal tender laws so that privately-issued currencies could compete openly on the marketplace with various government-issued currencies.

Whatever the endgame of the resurgent gold debate may be, it’s certainly encouraging to see that Americans are beginning to understand they have been systematically looted by the inflation tax and that this phenomenon is also related to volatility in the business cycle.

Geoffrey Lawrence

Geoffrey Lawrence

Director of Research

Geoffrey Lawrence is director of research at Nevada Policy.

Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission.  Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association.

From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society.  Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics.  He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation.

Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke.  He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.