A Survey

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Published : April 02nd, 2017
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Today, we have an interesting paper by James Kimball, who looked at sixty-five economics textbooks for undergraduates to see how they represented the use of gold and the gold standard in monetary systems. It is from 2005, and is available here:


Here is a nice little section to get you started:

Most textbooks first introduce the concept of gold in a section on the creation and development of money. This section tends to be about one-quarter the way into most texts and is usually either a separate chapter or an introductory section in the chapter on money and banking. The basic fundamentals of exchange and market transactions have typically already been discussed. The typical section on the creation of money is between five and ten pages in length, of which the discussion of gold can run anywhere from a solitary mention of it in a long list of other common goods that have been used as a medium-of-exchange to a multi-page discussion. The most typical setup, especially in the more recent textbooks, rarely spends more than a paragraph talking about gold in this section. However, it is important to look at how it is presented.

Earlier period texts rarely editorialized in their discussion of the origins of money while most modern authors frequently used critical language whenever referencing anything having to do with gold. One text describes the varieties of commodity monies in this manner, “Primitive economies have used everything from precious metals and polished rocks to strings of seashells, wives, and slaves” (Reynolds 1966, p. 20). Many authors continually referred to gold as “primitive” or being indelibly linked to “less organized societies.”

Most modern texts spent far more time on obscure instances of commodities developing into money than the development of gold. The most common commodities were the Stone of the Island of Yap and cigarettes in concentration camps during the World Wars. Particularly in modern texts, these examples frequently constituted the bulk of their discussion, with gold receiving only scant mention. One text focused almost exclusively on the use of cows as money, pointing out the etymology of terms such as pecuniary and comparing a cow-based monetary system to our gold-based system, resulting in one of the odder discussions encountered,

“just as some people of an earlier period probably continued to think that gold and silver served as money only because they were “backed” by cows, so some people continued for years to believe that demand deposits and bank notes were not “real” money, but only valuable because they were “backed” by gold.” (Suits 1973, p. 249)

It is clear that textbooks’ representation is not much more than propaganda; but, it sounds like that is the rule regarding other subjects as well. This has been going on a long time. It is an aspect of “cultural Marxism” that dates from at least 1920 or so. John Chamberlain, author of The Roots of Capitalism (1959), recalled his undergraduate education at Yale University during the early 1920s.

We never read Adam Smith’s The Wealth of Nations. We heard plenty about it, however. The professors treated it condescendingly; we were told it was the fundamentalist Bible of the old dog-eat-dog type of businessman. … After 1933 we began to get the centralized state and interventionist controls of industry. Actually, however, the inner spirit of the old America had been hollowed out in the Twenties. … We were the ignorant generation. … The first “great book” in economics we read was Marx’s Capital. We had nothing to put against it.

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Nathan Lewis was formerly the chief international economist of a firm that provided investment research for institutions. He now works for an asset management company based in New York. Lewis has written for the Financial Times, Asian Wall Street Journal, Japan Times, Pravda, and other publications. He has appeared on financial television in the United States, Japan, and the Middle East.
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