Robert P. Murphy

The Theory and Brief History of the U.S. Gold Standard

To fully understand our current global monetary system, in which all of the major powers issue unbacked fiat money, it is helpful to learn how today’s system emerged from its earlier form. Before fiat money, all major currencies were tied (often with interruptions due to war or financial crises) to one or both of the precious metals, gold and silver. This international system of commodity-based money reached its zenith under the so-called classical gold standard, which characterized the global economy from the 1870s through the start of World War I in 1914.

Under a genuine gold standard, a nation’s monetary unit is defined as a specific weight of gold. There is “free” coinage of gold, meaning that anyone can present gold bullion to the government to be minted into gold coins of the appropriate denomination in unlimited quantities (perhaps with a small charge for the service). Going the other way, to the extent that there are paper notes or token coins issued by the government as official money, these can be presented by anyone for immediate redemption in full-bodied gold coins. Finally, under a genuine gold standard, there are no restrictions on the flow of gold into and out of the country, so that foreigners too can avail themselves of the options described above. (Continue reading article)

Who was Mises?

The basic premise behind the Austrian School of Economics

The only thing keeping the market up; how does all the new money being pumped into the market work?

The fascinating history of money; defining the dollar

Why they put it in the Constitution about gold and silver coin being the real money

The times in American history when we were on the gold standard

What was going on in 1933 when Americans were forced to turn over their gold? Americans could not own gold until 1975 after the dollar was severed from gold

Who were the forces behind giving right to ownership of gold in 1975?

Learn more about Robert’s work and podcast

Robert P. Murphy is a Senior Fellow with the Mises Institute. He is the author of many books. His latest is Contra Krugman: Smashing the Errors of America’s Most Famous Keynesian. His other works include Chaos Theory, Lessons for the Young Economist, and Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) which is a modern distillation of the essentials of Mises’s thought for the layperson. Murphy is cohost, with Tom Woods, of the popular podcast Contra Krugman, which is a weekly refutation of Paul Krugman’s New York Times column. He is also host of The Bob Murphy Show.

Robert P. Murphy and The Gold Standard’s history and future, August 25, 2020