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Gold And Silver Promote Peace

No one knows for certain how the concept of “money” originated.  There have been various theories posited over the centuries.  The idea that I find most sensible is money was created as a means for paying mercenaries, soldiers from one land who were paid to fight for leaders of another land.  With gold and silver coins, mercenaries could return home knowing that they would be able to spend them no matter where they were.

The earliest gold and silver coins were not valued on the basis of what the issuing government proclaimed or the denominations they were called (drachm, daric, obol, stater, and the like) but were valued on the weight and purity of the precious metals content.

In the days of the Roman Empire, as the gold aureus, solidus, and the silver denarius were debased in weight and purity, the trading value of these coins also diminished.  The aureus and denarius held close to their original weights and purities for over two centuries, during which Rome rose in prominence.  The depreciation of its coinage paralleled first the stagnation of growth in dominions and then the eventual collapse of the Empire.

The United States grew as a world economic and political power partly on the basis of a relatively stable dollar as defined in weights of gold and silver content, and also on the avoidance of major foreign wars.

Today the U.S. Federal Reserve Bank has repeatedly announced a policy that it wants the purchasing power of the U.S. dollar to depreciate about 2% annually.  In the process of doing this, the U.S. government is effectively seizing, on a continual basis, part of the wealth of everyone who holds these dollars.  The same process is occurring in just about every other nation as well.

Seizing assets from people, as opposed to voluntarily trading with them, can be considered a form of violence.  If such actions were taken in the private sector, they would be crimes.

Further, there is endless wrangling between governments over which ones are depreciating the value of their currencies faster or slower than others, which adds to international turmoil.

Now, look at an alternative.  If money circulated on the basis of its metal value or in notes that were redeemable in full on demand for the underlying metal, there would not be involuntary government seizing of the wealth held by people, hence less violence against them.  If nations around the world were to adopt an unchanging monetary standard such as was done in early monetary history, there would also be fewer disputes between nations.

In other words, the use of gold and silver as money, (despite its early history of usage to pay mercenaries to fight in wars,) promotes peace.

 

Patrick A. Heller was the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award 2012 Harry Forman National Dealer of the Year Award, and 2008 Presidential Award winner.  Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2019), Professional Numismatists Guild, Industry Council for Tangible Assets, and the Michigan State Numismatic Society.  He is the communications officer of Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects.  Past newsletter issues can be viewed at http://www.libertycoinservice.com.  Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and become part of the audio and text archives posted at http://www.1320wils.com).

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