How did ancient countries get richer by mining gold or diamonds?

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Historically gold has been used as money. The value they had was the social acceptance behind them as a means of easing transactions. So wouldn’t mining more of it add more into circulation and lead to inflation (And with it a lower value of it’s value) back in those times? What gives?

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Anonymous 0 Comments

Using gold currency is severely limiting to economic development as a nation. Every time you wanted to expand the army, or build roads, or do anything then you needed hard currency to pay for it. You had to literally have the gold in the treasury or secure funding elsewhere. Currency is the fuel of every economy, the less fuel you have the shorter your economy can go. So mining, conquering, plundering, etc are ways to secure the currency to fund any projects you may want, even taxes have a finite amount you raise, even if you used commodities or land to pay taxes, many commodities are perishable and land requires investment to make fruitful, so you are back to gold and silver. Even paper money was backed by literal gold and silver for the vast majority of time, just look at the economic expansions in modern times by leaving the gold standard.

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