Who first called gold a barbarous relic?

by on October 3, 2011 at 12:28 pm in Economics, History | Permalink

Barry Popik, who by the way was a childhood chess friend of mine, reports:

Although Keynes is credited with calling the gold standard a “barbarous relic,” many other people had written similar terms (“gold is a relic of barbarism”) well before 1923. John Austin Stevens wrote to the New York (NY) Times in October 1873, stating that “gold is a relic of barbarism to be tabooed by all civilized nations.” Tennessee merchant John T. Goss testified before the U.S. Senate in 1894, saying that “Gold is a relic of barbarism and should be discarded by all civilized nations as a medium of exchange.” The book Civilized Money (1895), by Charles M. Howell, also declared that “gold is a relic of barbarism.” In December 1921, Thomas Edison said that “”Gold is a relic of Julius Caesar and interest is an invention of Satan.”

Barry’s impressive etymology page is here.

1 david October 3, 2011 at 1:41 pm

How many of these meant “…. and we should return to the silver standard”?

Of course, the Greenback party predates Keynes, so the notion of fiat currency was hardly new – but support for bimetallism or silver was far more common than support for fiat.

2 Cahal October 3, 2011 at 2:03 pm

As a note of interest. Edison was what we might now call an MMTer:

‘If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. … It is absurd to say our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.’

3 Bob Montgomery October 3, 2011 at 3:11 pm

“Gold is a relic of Julius Caesar ”

Isn’t that almost the opposite of calling gold a relic of barbarism?

4 Silas Barta October 3, 2011 at 3:49 pm

No — the Roman’s were well-organized, well-armed barbarians.

Although Caesar(s) didn’t even like gold. They had already dropped to silver, and then kept debasing it.

The more you want to raid the population of their labor, the more you hate hard currency.

5 Gary Gunnels October 3, 2011 at 3:57 pm

I’d just like to point out that the Romans had a tri-metal system of currency; gold, silver and copper.

Silas is right though; there was a point when the currency was so debased in the Third Century (before Diocletian in other words) that the Roman government would no longer accept said currency for payment of taxes – you had to send them the goods you were making on your latifundia or what have you.

6 Silas Barta October 3, 2011 at 4:24 pm

Interesting stuff, Gary_Gunnels! For a modern parallel, California’s budget woes have led the State to start paying people in State IOUs, demanding people accept them at par, insisting that they were as good as US dollars … and then refusing them as payment for taxes! ROFLcopter

7 Doc Merlin October 3, 2011 at 5:37 pm

If they were smart they would have accepted them as payment and let them circulate.

8 Silas Barta October 3, 2011 at 6:03 pm

What, that smelly garbage waste? What dupe would actually accept a CA IOU in payment for *anything*?

In other news, you banks had better ****ing accept these at par or we’ll seize all your stuff!!!!

9 Martin Brock October 4, 2011 at 11:19 am

Accepting them as payment for taxes would have violated Article 1, Section 10 of the U.S. Constitution, for what it’s worth.

10 Silas Barta October 4, 2011 at 12:10 pm

No, it wouldn’t have, Martin_Brock, any more than seizing your assets for non-payment of taxes, or allowing you to transfer your tax credits to others would be. (And the California IOUs can be viewed as transferrable California tax credits.)

11 Martin Brock October 4, 2011 at 1:28 pm

Silas, Something accepted in payment of state taxes is a legal tender.

A state does not accept assets seized from me for non-payment of taxes. The state sues me, and a court orders my assets sold, and the state collects the monetary proceeds of the sale in payment of taxes. If the sale raises less money than I owe, I still owe the balance unless a bankruptcy court relieves me of the obligation.

12 Steve Massey October 4, 2011 at 6:37 am

If you’re well organized, you’re not a barbarian, as I understand current usage of the term.

13 steve October 4, 2011 at 5:17 pm

I always thought civilization and barbarians in the ancient world was defined as those who had writting and those didn’t.

14 Jeff October 3, 2011 at 3:30 pm

Not saying he said it, but it sounds like something William Jennings Bryan might have said.

15 Andrew' October 3, 2011 at 4:16 pm

All those are down, gold is up. Too soon to tell.

16 ron October 3, 2011 at 5:37 pm

gold (gld)
1. Symbol Au A soft, yellow, corrosion-resistant element, the most malleable and ductile metal
2. Money; riches.
3. A light olive-brown to dark yellow, or a moderate, strong to vivid yellow.
4. Something regarded as having great value or goodness

Apparently the economists have yet to convince those who make dictionarys that gold is not money.

17 8 October 3, 2011 at 5:43 pm

Gold is the relic of a supernova.

18 Yancey Ward October 3, 2011 at 6:55 pm

There are all kinds of things I would like to take from people. Perhaps if I convince them it is barbarous, they will give it to me?

19 The Anti-Gnostic October 3, 2011 at 7:19 pm

Steak, beer and .308 ammo are all barbarous relics.

20 Mad Dog October 3, 2011 at 9:54 pm

If we put Keynes, Stevens, Goss, Howell, and Thomas Edison in a room and tossed a 1933 Gold Double Eagle on the floor then turned the light out would the coin still be on the floor when we turned the light back on? Gold – numismatic or speculative – will always have value of last resort.

21 Pat MacAuley October 4, 2011 at 12:04 am

In 1923 the price of gold averaged $21.32 per troy ounce. Today it closed at $1668 per ounce. So much for Keynes as a great investment advisor.

22 T. Shaw October 4, 2011 at 10:34 am

If your great grandfather had retained a 1913 US dollar today it would purchase four cents worth of goods made in China.

An ounce of gold is approximately 1,650 of them scraps of paper.

23 Gepap October 4, 2011 at 4:05 pm

So wait, fiat money “has no value” but you measure the supposedly inherent worth of gold by the number of worthless scraps of paper you can trade for it?

Are you people so blind as to think that line of thought make any sense?

24 Pat MacAuley October 4, 2011 at 5:44 pm

No. Our fiat money still has value as a medium of exchange, but it has not been a good STORE OF VALUE. One way to measure the fiat dollar’s erosion as a store of value is by comparing prices (in fiat dollars) over time. T. Shaw uses the bundle of goods and services in the CPI as a measure to conclude that the fiat dollar has lost 96% of its purchasing power since 1913, so the fiat dollar has been a lousy store of value. Comparing the number of dollars needed to buy an ounce of gold, the fiat dollar has lost over 98% since 1923 when Keynes declared gold to be that barbarous relic.

In theory I think the fiat dollar could be a very good device, especially considering the environmental destruction that gold mining often involves. Unfortunately in practice the central bankers can’t resist debasement of fiat currencies, usually for short-sighted goals. This massive debasement of the currency has cause individuals to overconsume things that are believed to be a good store of value, such as precious metals, collectables, real estate, etc.

25 Martin Brock October 4, 2011 at 10:40 am

If you put a 1933 Gold Double Eagle and a glass of water on the floor, which is still on the floor when you turn on the light?

Here’s a clue. You need to know the last time Keynes, Stevens, Goss, Howell and Edison had a drink of water and when they can expect their next drink and whether they can expect to exchange gold for a drink.

If gold is not a statutory, legal tender, it does not become the common tender. When it is a statutory, legal tender for all debts (or only debts to the state if taxes and other statutory rents are high enough), it is fiat money as much as a greenback.

26 Curious October 4, 2011 at 7:47 am

And has any of these gentlemen bothered to explain exactly what this is supposed to mean? Or did they just expressed their disdain for gold and the gold standard by associating it with barbarity? Seems so to me. Quite shallow of them.

27 Martin Brock October 4, 2011 at 11:14 am

These men were intimately familiar with the realities of a particular gold standard, because they lived in a world shaped by a gold standard. Their words take many things for granted, because they speak to other people living in the same world.

Expecting these men to explain their disdain for a gold standard in detail every time they discuss it is like expecting me to explain my disdain for a wart on the end of my nose in detail every time I discuss it.

By contrast, you and I are familiar only with historical theories of a gold standard. When you and I discuss “gold standard”, we likely aren’t even discussing the same thing, so we must explain ourselves in detail.

28 mjw149 October 4, 2011 at 2:54 pm

I’m guessing ol’Edison was maxing out his credit cards, eh?

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