Prologue
I want to thank those here who–intentionally or not–moved my knowledge forward on an important subject. Whereas I started my investigation trying to answer the question, “why on Earth is the price of gold going through the roof?”, our conversations took an interesting turn to the currencies, the Gold Standard, macro economics, activist tactics and finally politics and morality.
I have certainly answered all of the questions in my mind about the present-day spike in the price of gold. The discussion about the Gold Standard, however, has been particularly interesting.
My Conclusion About the Gold Standard
The Gold Standard is immoral. Advocating it is not only immoral, but impractical in the USA today from an activist standpoint. Objectivists should not advocate the Gold Standard any more than they should advocate increased spending for public schools.
The insidious way in which the Gold Standard muddies the concept of true liberty should make it a mortal enemy of Objectivists. The logical foundation of the Gold Standard is government control over the currency businesses and individuals use to trade. A proper government has no moral right to meddle in the area of trade. Nobody has a right to shove any currency, backed by anything down my throat. The Gold Standard presupposes the opposite.
It is said that every government program starts with the “best intentions”. While I wouldn’t say “every program” it’s fair to say that many are started by smart, well-meaning people who think they are doing the most scientifically intelligent thing at the time. Clearly the foundation of this–that you have a right to impose your conclusions on others–is immoral.
More subtle, however, is that these people are bad for business. No matter how “perfect” something seems in the present, there is simply no way of knowing what creative entrepreneurs will think of in the future. No matter how practical anything in the realm of business might look in the present, it’s bound to be reversed later and if it’s enforced as a matter of law, it’s bound to restrain trade in unnatural ways. Matters of business are not like those of philosophy, they are not axiomatic and unchanging.
Thus the only possible rationale for Objectivists to advocate the Gold Standard is on “temporary practical grounds”. That perhaps we should advocate something that we know is ultimately immoral and incorrect because this will “push things in the right direction”. To be clear, in narrow cases, I am all for that, and most decidedly live in the “real world” in this regard.
But the Gold Standard falls down by this measure for two inter-connected reasons.
First, the “house is not on fire”. There is no “emergency” with respect to our situation with the US dollar. It is not in immediate danger of being significantly devalued, and even it were, the current legal situation in the US makes this situation non-lethal: we are all currently free to protect ourselves from any marginal issues with our currency, such as buying and using other currencies, and making hedging investments.
Second, as a policy move, this is not an easy one. An actual shift to the Gold Standard would be extremely disruptive to world-wide trade if it were done all at once, and it would be extremely difficult to engineer a long-term, less disruptive path. None of the advocates of the Gold Standard that I have seen have written anything along the lines of a paper titled, “Here’s How the US Can Painlessly Move to the Gold Standard”. My impression is that these advocates actually don’t care about such practical details.
This is not to say that advocates of philosophical theory should always be concerned with practical implementations–there’s work two do in both areas–but in this case, the only moral foundation of the Gold Standard is it’s current, here-and-now practical implementation within the current laws of the USA, the current political climate in Washington and one’s assessment of the current appetite to make a change like this.
But the advocates of the Gold Standard that I have read have not concerned themselves with anything “current”. They are “idealists” (as I would consider myself for instance) advocating an “ideal”.
There’s nothing wrong with advocating an ideal as apart from current practical realities. Advocating a temporary stop-gap as an ideal, however, is a perversion.
The Objectivist Advocacy of the Gold Standard
One of my favorite anecdotes of Ayn Rand’s was the story of Aquinas’ Angel. The anecdote (I recall from memory) went something like this:
Angels, according to Aquinas, are “perfect” in many ways. In particular, one of the amazing things about angels is that they instantly know all of the conclusions of their basic premises. They instantly know what follows, and does not follow from the basic teachings of God, etc.
Ayn Rand found this construct important because this is exactly what human beings are not. We are not Aquinas’ Angel. It is not enough to simply learn all of the basic philosophical premises there are to learn and assume that you will draw all of the logical conclusions from those premises correctly. You can make mistakes anywhere along the way.
The Gold Standard, while not formally in Ayn Rand own words, is closely associated with the Objectivist movement. It is a cause célèbre as it were of virtually all major voices of Objectivism today. It has its place in official lexicon of Objectivism.
I would submit that the origins of this fixation–kicked-off perhaps by none other than the famous Alan Greenspan–were wrong. That Greenspan, and those around him, incorrectly applied the premises of the proper role of government.
Badly formed concepts are bound to drag in all sorts of riffraff. It’s a veritable secret handshake of the anti-conceptual mentality. Objectivism is, on a daily basis, under siege by those whom would understand only a smattering of its tenants and move freely between perfectly correct ideas and perfectly terrible ones without knowing the difference. In the marketplace of ideas, however, a specialty store does not compete with Walmart by being more like Walmart. Not only would “selling out” be a shame for Objectivism, it plainly would not work.
I once asked Leonard Peikoff what he thought of Alan Greenspan (this was when he first became Fed chairman). His response was, “I don’t know, but he’s in Washington and I’m in Laguna Hills”. Which was to say (to summarize the context) that maybe he was doing good even though it was unclear he was a “consistent Objectivist”.
The deeper meaning was also clear: it’s hard to argue with success. But however hard, Leonard Peikoff and the rest of the movement should have taken up the challenge.
Bad premises always come back to bite you. That the advocacy of the Gold Standard associates Objectivism with all sorts of dodgy characters is no accident. The word should be removed from the Lexicon and removed from the generally accepted list of topics that official voices of Objectivism officially care about.
Such a move will serve to puzzle and amaze a lot of people. There will be a lot of talk about it, and many will be forced to check their premises deeper than they have for a long time. Many will reject Objectivism altogether because of this one issue.
And all of that, my friends, is a good thing.