Draggingtree Posted April 25, 2013 Share Posted April 25, 2013 Ludwig von Mises Institute : Come Back to Gold Mises Daily:Thursday, April 25, 2013 by Ludwig von Mises [Excerpted from chapter 11 of Omnipotent Government by Ludwig von Mises.] The gold standard was an international standard. It safeguarded the stability of foreign exchange rates. It was a corollary of free trade and of the international division of labor. Therefore those who favored etatism and radical protectionism disparaged it and advocated its abolition. Their campaign was successful. Even at the height of liberalism governments did not give up trying to put easy money schemes into effect. Public opinion is not prepared to realize that interest is a market phenomenon which cannot be abolished by government interference. Everybody values a loaf of bread available for today's consumption higher than a loaf which will be available only ten or a hundred years hence. As long as this is true, every economic activity must take it into account. Even a socialist management would be forced to pay full regard to it. In a market economy the rate of interest has a tendency to correspond to the amount of this difference in the valuation of future goods and present goods. True, governments can reduce the rate of interest in the short run. They can issue additional paper money. They can open Link to comment Share on other sites More sharing options...
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