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Published : October 16th, 2022
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Category : Editorials

This year, I reread Richard Salsman’s 1995 book Gold and Liberty, as a counterpoint to the recent The Gold Standard, Retrospect and Prospect. Both books were published by the American Institute of Economic Research, or AIER.

February 27, 2022: The Gold Standard, Retrospect and Prospect #6: International Monies and Digital Gold

December 22, 2019: Gold and Liberty, by Richard Salsman

The book is available here:

Read Gold and Liberty.

In 2019, I made only a brief mention of the book. Today, I will say a little more about it.

I would say that Gold and Liberty is the single best book about the gold standard maybe since about 1950, up to the publication of my own Gold: The Once and Future Money in 2007, and some other very good books that have followed since then. Actually, I don’t know of any single book from before 1950 either that I would say is better. So, it is pretty good.

The approach, or background, is a little different than mine. One nice thing about the book is that it has a long list of references that I was not familiar with. It has a little different stance than me. I tend to emphasize centralized systems, such as today’s monopoly central banks. Salsman and many others argue toward “free banking” or other private-market-flavored solutions, arguing that government money monopolies are too prone to corruption. Both could work. A private-market solution (let’s say, a gold crypto stablecoin) is more likely to be successful in the West, or some other places like India, where it doesn’t seem likely that governments will ever have any interest, or expertise, to put together a functioning gold-based currency. But other countries — let’s say, Malaysia or Qatar — might be very friendly toward a gold-based domestic currency, in the current central bank model.

Nevertheless, there is very little in the book that I would argue against. This, we should note, is in contrast to The Gold Standard: Retrospect and Prospect, where I was arguing against nearly every paragraph. In hindsight, I think The Gold Standard: Retrospect and Prospect is probably a corrupt book, intentionally filled with falsehood and error, as ineffective “controlled opposition” to central bank fiat manipulation (one of the ten precepts in Karl Marx’s Communist Manifesto). There is really no other way to explain the “bait and switch” techniques common throughout the book, where, after pages of “sound money” hoohah, we get served up some NGDP Targeting nonsense.

I met Richard for the first time at an AIER event at their headquarters in Massachusetts. We might be the only two people in the world who could end up falling over laughing at our remembrances of the stupidities of the Monetarists of the 1980s — and also Rothbard’s “fractional reserve banking” crew. He is now a professor of economics at Duke University, and wrote a nice book about sovereign debt crises. However, before then, and when he wrote Gold and Liberty, he was working at HC Wainwright in institutional investment research. So, he has that familiarity with real-world economies that informs much of the best work, including that of Jim Grant, Larry Kudlow and Art Laffer.

January 29, 2018: An Inquiry Into the Nature and Causes of the Wealth of States (2014), by Arthur Laffer, Stephen Moore, Rex Sinquefield, and Travis Brown

February 23, 2017: James Grant Explains How A Crash In 1921 “Cured Itself” — With The Help Of Good Policy

October 21, 2016: The ‘Secret History Of American Prosperity’ Needs To Become A Lot Less Secret

Both books were published by AIER. I hope that AIER, which has a very nice history of gold standard activism going back literally to the devaluation of 1933, will today manage to produce more good work like Gold and Liberty, and beware of potentially corruptive influences. These are usually pretty easy to spot, because they have some kind of: “The gold standard worked for many centuries, but it would be difficult today because blah blah blah,” or: “Sound Money is very important, and so NGDP Targeting.”

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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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