Page:David Atkins - The Economics of Freedom (1924).pdf/138



is only one rational defense of the gold standard; but this its advocates repudiate, employing it solely as an epithet to be flung at certain other means of measurement.

If by legislation, or what they scornfully call “fiat,” the quantity of gold within the country were fixed and an inventory of our wealth taken at the same time, we would then have two known quantities, and could scientifically express a fractional part of one in terms of a fractional part of the other. For one glorious moment we would have a gold standard which mathematically measured visible value in terms of ounces of gold. But to maintain this ratio inventors, poets, preachers and scientists would have to be kept under lock and key like lunatics for fear they might make some unauthorized contribution to value and thus upset the legal ratio. Gold also would have to be put under lock and key and made a government monopoly, so that with each increase in visible value, which was properly authenticated by a suitable bureau, more gold could be mined under strict government supervision: the export of gold would also have to be controlled; and in this way, by infinite care and adjustment we might maintain a rude measure of what we now call “value.” But we would promptly invite smuggling, bootlegging and moonshining—the painful reactions due to an effort to ensure virtue by fiat.

The opposition to fiat is very sound; but only by fiat or legislation can gold conceivably be justified as a basis of measurement. Fiat money is as objectionable as the gold standardist contends; but political discretion, such as we now employ, is still worse from a scientific point of view. What we require for the measurement of value are measurable and ultimate factors. Scientific value, as shown more fully later