Why did we abandon the gold standard?
In: Economics
a different way of thinking about it without thinking about money at all is this: if the government has the people, material, and experience to do something that will generate wealth (say, building a mine, or a factory), it’s silly to artificially limit that simply because you don’t have enough of an arbitrary metal. once governments realized that, the gold standard was over. the quote from some economist was ‘anything we can *actually* do, we can afford.’ meaning that it doesn’t really matter if there’s no gold. as long as you can get the workers fed and housed, the wealth will be generated as a byproduct of whatever work your society has them doing. markets and analysts will arise as a byproduct to assess the credibility of things so that effort isn’t wasted, and everything is credited against the valuation of potential wealth production rather than the arbitrary value of a corrosion-resistant metal.
ofc this is all in a world where there was essentially unlimited wealth to be exploited with this system, and new tech to multiply those gains. now, toward the end stages of increasing productivity, there are a lot fewer exploitable wealth pools. one of the reasons that things seem to be changing so much, so quickly
edit: fucked up the quote. the economist was Keynes in 1942: https://jwmason.org/slackwire/keynes-quote-of-day-2/
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