George Gilder is most recently the author the ground breaking The Scandal of Money: Why Wall Street Recovers but the Economy Never Does. He is a founding fellow of the Discovery Institute and a senior fellow at the American Principles Project, which sponsored this book.
Gilder is also the author eighteen other well-regarded books including Knowledge and Power and Microcosm. After the publication of Wealth and Poverty, he became Ronald Reagan’s most frequently quoted living author.
In the following clip — from a speech Gilder gave at FreedomFest 2016 — he discusses why government ought to consider money as a measurement of value rather than as a magic wand to create growth:
If money is not an instrument of power, not a magic wand that governments can wave to summon economic growth, what is it?
I’ve been pondering this issue for many years and I didn’t get it right in Wealth and Poverty. Steve Forbes gave me the key insight when he began focusing on money as a clock or as measuring stick. He used the analogy of a clock. If a measuring stick is changing constantly, how can enterprises use money as a guide to their learning processes. If the clock was changing day by day; the hours change, the minutes change, as Steve pointed out, we would soon have times of false obligations — you would have to be constantly hedging the clock.
And that’s really what’s happening, because I believe that most fundamentally, money is time.
This is why, as Jim Grant has pointed out, low interest rates or zero interest rates do not spur entrepreneurs to new fits of creativity and investment. Low interest rates actually slow down the economy. It’s like throwing away the clock in a basketball game — that was Jim Grant’s analogy. You don’t have to score; you don’t have to make decisions. You can just keep passing the ball around and keep it away from LeBron for the whole 42 minutes.