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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For the most part? Because it’s pretty.
It’s relatively easily found in it’s “native” form — that is, as a metal and not a rock that must be smelted before you can get the metal. Not in great quantities, sure, but it was probably one of the very first metals we ever worked. But it wasn’t *useful* – it couldn’t be used for armor, weapons, clothing, or tools. It was just pretty.
So you have an uncommon and unique material that is easily shaped (compared to stone and gems) and not really able to be used for anything particularly useful related to survival. Look at that, you have a status symbol.
Gold has become pretty useful in the modern era due to its relationship with electricity, but that’s pretty recent. Historically gold has been valuable because gold has been valuable and we’ve never been able to mine enough of it to make it less valuable.
There’s a *lot* of stuff that’s valuable because it’s rare/uncommon and of little utility, and thus boasts of your ability to waste resources on something other than utility.
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