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Posts Tagged ‘Austrian School of Economics’

From page x of The Gold Standard: Perspectives in the Austrian School:

In 1920, early in his career, Hayek advocated the international gold standard, even suggesting that a proper monetary reform would consist of a 100 percent gold cover for notes as well as bank deposits.

Another variant of pro-gold standard positions among Austrians favors free banking with fractional reserves, and White represents this view.

So we see from these quotations that the gold standard doesn’t necessitate 100% reserves of gold backing the entire money supply, and that several variants are permitted.

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According to Thomas Luongo, writing for LewRockwell.com, it does.

He states:

Since being “converted” to both libertarianism and, by extension, Austrian economics I have developed a passion for money.

I’d classify myself as a libertarian, and I’m certainly no supporter of the Austrian school of economics, primarily due to its advocation of a gold standard, as described in this article by Lew Rockwell, founder of the Mises Institute.

For me, a libertarian is someone who believes that limited government is the most likely to protect the liberties of the people whom it governs, and that shouldn’t necessitate an economic system based on a scarce resource such as gold.

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Dr. Ravi Batra, progressive economist and professor of economics at SMU, stated his support for a partial gold-backed currency as a replacement for the U.S. dollar.

On April 30, 2010, on the Thom Hartmann show, he stated at 57:30:

I don’t know if we will ever have one world currency in my lifetime, but currency should be backed up, partially at least, by gold, so that nobody can just inflate currency to fix the problem and leave workers dry. Wages have been stagnant at the same time, so we need to have some backing for the currency as well, and that should be gold.

The U.S. dollar was on a full gold standard until 1933, when most domestic gold was confiscated and transferred not to the U.S. Treasury, but the illegal Federal Reserve. After the confiscation, the price was raised from $20.67 USD to $35 an ounce. From then until August 15, 1971, the U.S. was on a partial gold standard, with foreign currency directly convertible into gold at the rate of $35 an ounce. Since then, gold has been able to freely float, and has hit all time highs since the economic turbulence of 2008, now over $1200 an ounce.

The call for a return to a gold-backed currency truly crosses the political divide, with a progressive economist singing the praises of a gold standard along with proponents of the libertarian Austrian School of Economics.

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