I hear some economics arguing that currency should be pegged to gold as a way of ensuring that its value isn’t arbitrary / volatile but I don’t understand how this would solve the problem. I understand that gold is a scarce resource that is difficult to mine but is it this alone that gives it intrinsic value ?
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Gold used to make sense as a medium of exchange because it had struck a good balance between rarity and availability. It doesn’t rot or go bad like organic things, and doesn’t tarnish, rust, or turn to dust like other metals do. It sticks around and doesn’t change in any environments you’d find humans in. Thus, creating a large stockpile of gold for a long time was a good way to hoard value and thus power.
In recent decades things like nuclear research materials have outpaced gold in the value and power they can confer. D20-18, for example is far more valuable than gold, gram for gram. And that’s one of the tamest things you can come across in this world. Don’t get me started on things like plutonium or other trans-uraniums.
In economies with such materials available gold sort of “loses its lustre” so to speak. It’s no longer a high concentration of value or power as needed by the powers that be.
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