Page:David Atkins - The Economics of Freedom (1924).pdf/146

 “People must live on goods. In order to do so goods must be produced. To get them produced they must be paid for with real and substantial pay. To pay for goods with money requires that the money should have a fixed value. To have that value it must represent something which people will exchange for goods.” The italics are inserted by the writer. This whole statement reeks with innocent superstition. Our gold obligations, whether prompt or deferred, are not real or substantial: they rest on political discretion. They have not a fixed value and do not mathematically represent something. Even if they were backed entirely by gold we would be no better off for this has no fixed economic value: it would still have a fixed physical value—density, malleability, color and durability—and practically no economic value!

The uses of gold are obvious enough. Wherever there is distrust and disorder and the possibility of arbitrary political action, some article of highly concentrated commercial value will be required to settle balances. It is possible that the ritualist will find himself in agreement with this assertion; but it does not say much for his conception of democracy.

The havoc worked by the use of gold as a basis of value, within an area where the potential volume of effort is as great as that of the United States, is due largely to real or artificial scarcity. From a small focal area it is projected over a billion acres, and a slight variation of quantity at the centre results in alarming distortions of the far flung image. It is not only insufficient in quantity for the purposes of trade, but it is insufficiently controlled and at times poorly projected into space. It is either desperately wanted, or not wanted at all. It has, however, great commercial value as an international medium of exchange and for use in the arts; and it is probable that its free market value today would be far greater than the official price. Platinum which enters an open market, and is a poor competitor of gold in the decorative arts, has risen far above its normal parity with gold. Quite apart from its politically-diminished purchasing power in foreign markets from which, owing to tariff-barriers, it returns with a half filled basket, gold is inadequately paid for today at home in