We are pleased to publish Mr. Salsman’s “Gold and Liberty.” This replaces earlier AIER publications on the history and significance of gold (previously published under the title “Why Gold?”). The current work benefits from, and includes some of the lessons of, the experience of the past quarter century of worldwide fiat currencies. Its major focus, however, is the importance of the evolution of gold-based money to human advancement and, even more significantly, to human freedom.
From the INTRODUCTION
NEARLY all the gold ever extracted from the earth in human history remains in someone’s possession today, and gold continues to be mined in quantities that would have astonished the ancients. What is it that so attracts man to gold? As this book will show, gold retains its worth no matter what the economic or political situation. For this reason, among others, gold has served as money throughout human history.
Gold was first coined more than 25 centuries ago and has been used as money by all great civilizations. Greece and Rome used gold money. The industrial revolutions of Britain and America in the 18th and 19th centuries were built on a foundation of gold-convertible money. Relatively rapid and noninflationary growth was achieved in the United States, Germany, and Japan after World War II under the Bretton Woods system, which, despite serious flaws, retained gold as its centerpiece.
The political system determines whether or not gold is part of a monetary system. Historically, when there has been greater political liberty, gold has been an integral part of the monetary system. In periods of increasing government intervention in and control of economic decision- making, in war or in peace, gold has been forcibly removed from the monetary system....