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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> I hear some economics arguing that currency should be pegged to gold as a way of ensuring that its value isn’t arbitrary / volatile
Are you sure it was an economist who said this? There are some fringe political movements that want to do this, but it isn’t really something you hear from academic economists. There are very few things economists agree on, but a gold-backed currency is just a strange and arbitrariy choice and it’s difficult to make an argument that it would help achieve an outcome that anyone wants.
The main arguments you hear in support of the gold standard from non-economists are (1) rose-tinted-glasses views about how good life was in the 50s and 60s, and (2) weird conspiracy theories about how the current monetary system works (to be clear, financial institutions are often engaged in nefarious conspiracies – Enron, Libor, Wirecard, the entire cryptocurrency industry, etc., etc. – but the ones alleged by these people don’t make any sense).
> I understand that gold is a scarce resource that is difficult to mine but is it this alone that gives it intrinsic value ?
It has value because it is useful for a variety of purposes, such as making jewellery and electronics, along with all kinds of niche industrial and medical applications. However, much of its value comes from people believing that it is valuable and wanting to invest in it.
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