The Gold Standard

I’ve always found Murray Rothbard’s critique of the State compelling, particularly when it comes to money. My own experience has made the issue personal.

Before the 2020 pandemic, I was paid by check, cashed them, and kept most of the money in a home safe. I paid for everything in cash and never used credit cards. Watching that pile of cash dwindle forced me to confront my spending habits. When I saw myself spending too much, I adjusted accordingly.

Then the pandemic changed everything. My employers required direct deposit, and my entire approach to money changed. I stopped keeping cash in my safe and began paying for everything with credit cards. I started spending considerably more, and that pattern continues today. I find myself working harder just to pay my bills.

That experience taught me something important: you don’t need to be an economics expert to recognize that something is fundamentally wrong with how America handles money today. When I could physically see my money disappearing, I was more conscious of its value. When that tangible connection disappeared, so did much of my restraint.

But this personal experience led me to a bigger question.

I can’t print money when I need it. If I print my own $100 bills and pass them off as genuine U.S. currency, I’m committing a crime. Yet the monetary system lets the Federal Reserve create central-bank money, commercial banks create deposit money through lending, and the federal government finance spending through borrowing.

These are different processes, but they raise a fundamental question: Why do the institutions that control our monetary system have powers ordinary citizens don’t, and what prevents them from abusing those powers?

This is one reason I defend the gold standard. By tying the dollar to a fixed quantity of gold, it constrained monetary expansion. It wasn’t perfect, and it could make responding to economic crises harder. But it placed a meaningful limit on the government’s ability to expand the money supply at will. Today’s fiat-dollar system has no such gold-convertibility requirement.

This is where Murray Rothbard’s ideas resonate with me. He challenged the State’s monopoly over money and warned that monetary expansion could redistribute wealth, benefiting those who receive newly created money first while diminishing the purchasing power of others. When prices rise faster than incomes, ordinary Americans pay the price through reduced purchasing power and eroding savings.

Consider the double standard.

If I spend beyond my means, I have to work harder, cut expenses, or borrow money and accept the consequences. I cannot create dollars to pay my bills. The federal government, however, can run persistent budget deficits and borrow to finance its spending without balancing its budget every year. Government borrowing isn’t the same as printing money, and the government faces real financial constraints. But it has options ordinary citizens don’t have.

The average American is expected to exercise financial discipline and live within their means. Why shouldn’t the government face meaningful fiscal and monetary restraints as well?

I’m not suggesting that returning to the gold standard would solve every economic problem. I’m arguing that the concentration of monetary power deserves serious scrutiny.

My own experience taught me how profoundly the way we handle money can influence our behavior. Rothbard helped me see the larger institutional question: what happens when the people who control the money have far less direct accountability for their financial decisions than the people who must earn it?

You don’t need an economics degree to ask that question. You just need to work for your money, watch your expenses, and wonder why the rules seem so different for the State.

A government’s legal authority to exercise a power doesn’t automatically make that power just.