Presidential aspirant Ted Cruz, who reportedly just surpassed Ben Carson as number two in Iowa, is proving unflinching in his advocating for the gold standard in his campaign. He is the clearest and most committed, although not alone. Rand Paul also is a gold standard advocate, and Trump and Carson are clear sympathizers.
The gold standard was, until fairly recently, studiously ignored by the elites. This ignorance extended very much to most elite academic economists (who know little or nothing about the gold standard’s history and mechanics). There is evidence that the discourse now is moving into a new and much healthier phase.
Labor leader Nicholas Klein, in a 1918 address to the Amalgamated Clothing Workers of America, (often incorrectly attributed to Gandhi) proclaimed:
First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you.
After long being ignored, articulate gold standard proponents like Ted Cruz were treated to ridicule by such ridiculous figures as Paul Krugman. Elite economist Austin Goolsby a few years ago famously tweeted “#fedvalentines Roses are red. Violets are pink. Don’t listen to goldbugs. No one cares what they think.” It was typical of a certain time, Klein Cycle Phase 2.
That said, times change.
There is some persuasive evidence that we now are reaching Phase 3 of the Klein Cycle: “and then they attack you and want to burn you.” Elite intellectuals recently have been publishing scholarly yet popular books about our monetary policy to extensive attention in elite venues such as The New York Times, The New York Review of Books, and the Wall Street Journal, among others.
Roger Lowenstein recently published America’s Bank: The Epic Struggle To Create The Federal Reserve, glowingly reviewed in the New York Times by former treasury secretary Robert Rubin. It also received the keen attention of The Washington Post, The Wall Street Journal, and NPR’s Marketplace, among other venues.
Shortly thereafter came historian Eric Rauchway’s The Money Makers: How Roosevelt and Keynes Ended The Depression, Defeated Fascism, And Secured a Prosperous Peace.
Now comes Ed Conway’s The Summit: Bretton Woods, 1944: J.M. Keynes and the Reshaping of the Global Economy, a narrative about the great post-war monetary conference. Reviewed by Lowenstein in The New York Review of Books, this appears another serious-minded look at the monetary system that undergirded a very prosperous post-war age.
These works all represent, at some level, serious-minded “attacks” (although not deeply informed on that which they are attacking) upon the gold standard. The critical attention they are receiving falls neatly into the category of “they want to burn you.” This development in the discourse really is excellent.
There were, of course, precursors to these works. Notable among them are Benn Steil’s The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, and Liaquat Ahamad’s Lords of Finance: The Bankers Who Broke The World, both to great critical acclaim. That said, these appear as outliers to the Klein Cycle.
If the Klein Cycle holds — and it always has — we may be closer than we think to seeing the elite progressive cultural hegemony building monuments to the gold standard. “Monuments” might even begin with the Republican nomination of a gold standard proponent like Ted Cruz or Rand Paul, or a gold standard sympathizer, for, and election to, the presidency of the United States.
Unless, of course, Hillary Clinton, Bernie Sanders, and Martin O’Malley decide not to be left out of this incipient monumental development. Grover Cleveland, a great president and a great progressive Democrat, was a staunch supporter of the gold standard. There is no inherent conflict between Progressivism and the gold standard.
“First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you.” The gold standard no longer is being ignored. It is no longer merely being ridiculed. We enter the phase of “attack and burn.” At long last!
Done right, the gold standard a great force for equitable prosperity and, as many of its leading proponents such as Lewis E. Lehrman and Steve Forbes believe, requisite to the affluence of a thriving middle-income America. Monuments for initiating a new golden age may not be so far away.
Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics.