Foreword to the second edition of The Case for Gold (2011)
This country had the chance to avoid the disastrous
meltdown of 2008 and following, the one that has led to the nationalization
of industries, the creation of oceans of paper money, and the destruction of
so many American dreams. The answer that might have been is the one you hold
in your hands: the minority report of the US Gold Commission of 1982, written
by Ron Paul and signed by Lewis E. Lehrman. It
provides an outstanding history, wonderful theoretical analytics, and a
proposal for the return of sound money, which is gold.
Alas, it was the minority report and therefore
killed by political forces. Of course, the fix was in from the beginning. The
commission only came to exist in the first place as payoff to certain "goldbugs" in the Republican Party in those years.
Ronald Reagan was one of them. So his influence was part of the reason the
Commission was created. But it wasn't created to institute a gold standard.
It was created to bury the idea once and for all.
Ron Paul wouldn't let it happen. The result was this
book, which remains a mighty case for sound money and the blessings that change
would bring to this country. A gold currency would restore economic stability
and growth. It would eliminate unemployment. It would force government to
spend only what it can collect in taxes. It would rein in the welfare state
and the warfare state. It would give the people control of money again. It
would restore what we used to call freedom, which is a core of social and
civic life that is impenetrable and inaccessible to government planners.
With a gold standard, the Fed could disappear. The
banking industry would become an industry like any other, subject to the
profit and loss test and given no guaranteed bailouts at taxpayer expense.
The financial industry would be forced to surrender its love of socialism
(for losses, not gains) and become honest again. We would all start living
within our means and thriving off private wealth rather than depending on the
public sector to save us.
Trade with other nations would benefit.
Protectionist wars rooted in currency manipulation would cease. Policy options
in Washington would be mercifully restricted to only what Washington could
afford to do and afford to enforce. Vast swaths of the public sector as we
know it would have to just pack up and go home. This would be the greatest
blessing visited on this country in a century. But can you see why Washington
isn't interested? It has nothing to do with disagreements over economic
theory. It is all about who has power in society. Paper money gives power to
tyrants. Sound money – that is gold – gives power to the people
and the free markets they control.
So, yes, we should have listened to Ron in 1982. The
thing is that he – wisely and bravely – never stopped talking
about this issue. It turns out that this book, this minority report, is the
work of a prophet. It tells the truth and shows the way. It should be our
manifesto again. This timeless statement on behalf of economic truth can be
our guide.
They didn't listen then. But maybe they'll listen
now. We need monetary freedom more than anything else. The way digital
markets are advancing, it might come about with or without Washington's
permission. As Ron has always known, paper money cannot last. Either it has
to go, or the American dream has to go. They cannot forever live side by
side.
Llewellyn H. Rockwell, Jr
LewRockwell.com
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