The dry spell is over.
That’s the argument of Forbes columnist Nathan Lewis, in reaction to a new book by George Gilder on the 21st Century Case for Gold. Lewis points out that after decades of policy irrelevance, the money team is getting a whole new class of A-listers to defend reform and end the floating currency system. “The long era of monetary ignorance,” he says, “is finally passing.”
But why does Gilder stand out among the best pack of intellectuals “since about 1910”? Lewis explains:
Gilder’s new work is especially important because Gilder was not, historically, a gold standard advocate. The “supply side revolution” of the late 1970s and 1980s was Classical at its heart, and boiled down to what I call the Magic Formula of Low Taxes and Stable Money. A political consensus formed around Low(er) Taxes, but there was a lot less consensus regarding money, with most conservatives following Milton Friedman’s “a floating, managed currency with less inflation than the Keynesians” formulation.
… Thus, I think it is particularly significant that Gilder, who traveled to China with Friedman in 1988, has embraced what has always been a cornerstone of the Classical or Libertarian vision of good government – a currency as stable in value as possible, which, in practice, means one that is “as good as gold.”
Lewis sees Gilder’s new book as a sign that economists are abandoning Friedman’s stance defending floating currency and a new alignment behind gold to halt wage stagnation. He ends the piece with a prediction that real monetary reform isn’t far off:
I sometimes say: “If Milton Friedman were such a great economist, he wouldn’t have been a Monetarist.” Now George Gilder explains why, and a great number of other important things too. In the end, monetary arrangements will change when they have to change. That time is not yet here, but it might not be too far away. When it comes, the level of understanding of basic monetary topics will have to be better than it has been for most of the last century. With new work like this coming out, it will be.
Nick Arnold is a researcher for American Principles in Action.