Megan McArdle and bad comparisons

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I think this has got to be quite possibly the worst argument against the gold standard I have ever seen, bar none:

Commodities, almost by definition, are not stable. The price of gold looks as if it used to be stable, because the dollar was fixed relative to an ounce of gold. This does not mean that its value relative to other economic goods was unchanged. You could fix your currency to the price of a bushel of wheat, and suddenly "wheat bugs" would be claiming that wheat is the only reliable, stable commodity in the world whose price never changes. That wouldn't stop fluctuating wheat supplies from whipsawing your economy back and forth.
This is true, aside from the fact that wheat is a crop that can be mass-produced, and gold is an atomic element that we won't ever be able to produce on our own short of developing a mastery of the processes of nuclear fusion. Is it really so hard to imagine why gold is a good standard to use for our economy, since it is a very limited resource, unlike wheat, banana leaves or seashells? I guess it is not obvious to Megan, that since the only gold we have right now, is the gold we can dig up, that the ability of gold to fluctuate in value is significantly minute compared to fixing it to a bushel of wheat, which by comparison, any Tom, Dick and Harry could grow in their backyard.

The reason we have the issues with inflation that we do is that our currency policies put so little stable commodity value behind the printed dollar, that it would be charitable to say that it has been pegged to a bushel of wheat.

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gold is an atomic element that we won't ever be able to produce on our own short of developing a mastery of the processes of nuclear fusion

Actually, we can make gold in a reactor via transmutation; fusion isn't necessary. We just don't do it because it's not worth it economically.

Gold is definitely far better than wheat, though, and the comparison by Megan is absurd. The supply of wheat can change quite dramatically in a short time, depending on weather, plant disease, rot, fire, and farmers' preferences. Gold is immune to all these things; you can bury it on the seafloor for a thousand years and it will remain gold, just waiting to be recovered and put back into use.

The only time in human history that I can recall that there was serious instability in the value of gold was when the Spanish were plundering the New World and hauling the stuff back to Europe in enormous quantities. Gold experienced rapid inflation, and the Spanish economy went into a bear market for the next four centuries or so.

Other than that, gold is as stable as stable can be.

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