> He wrote about how the gold standard created responsible spending and more equality in the world:
The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active:
* https://en.wikipedia.org/wiki/Gilded_Age
It should also be noted that the gold standard did not bring any kind of price stability:
* https://archive.is/https://www.theatlantic.com/business/arch...
Further, sticking to the gold standard made the Great Depression worse as it reduced flexibility and options of central banks had, and made deflation worse:
* https://www.nber.org/papers/w3488
The sooner countries left the gold standard the sooner they started recovering from the Great Depression:
> The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active
I've got some news for you about modern levels of inequality.
I am aware of today's inequality (e.g., I read Piketty back when he was making a splash). But the critique is that Greenspan argued gold standard = less inequality and that fails on the historical record.
If we want to talk about the causes of the 'New Gilded Age' that's something else. As a general starting point I'd begin with:
* https://en.wikipedia.org/wiki/Friedman_doctrine
* https://en.wikipedia.org/wiki/Reaganomics
* https://en.wikipedia.org/wiki/Thatcherism
Gold Standard is probably a force that acts against inequality but the forces pushing inequality today are just much stronger. Technology that creates winner take all markets and incredible leverage with few people being one.
> Gold Standard is probably a force that acts against inequality […]
Is there evidence for this?
During the Gold Standard era there were many periods of deflation, which is bad for people with debt: back in the day this was often farmers, nowadays it'd be anyone with student loans or a mortgage.
Two points I'd hit on:
1) Deflation causes debt to become more expensive. Inflation causes your money to become worth less. There's a simple solution to debt becoming more expensive, but no practical solution to you getting a pay-cut every year, especially when a sizable chunk of people don't even realize they're getting a pay-cut and don't want to be unthankful for a "raise." That issue alone already causally explains much of the rise in inequality. Cut people's wages in a stable or deflationary system and there will be hell to pay. Cut them in an inflationary system and they say thank you.
2) Changes in the past are exaggerated. The Fed did a study some time back estimating CPI levels since 1800. [1] They found that from 1800 to 1950 the CPI never shifted more than 25 points from the starting base of 51, so it always stayed within +/- ~50% of that baseline. That's through the Civil War, both World Wars, Spanish Flu, and much more.
It's even more interesting to contrast this from 1971 onward. 1971 is when Bretton Woods ended and the government was given a free hand to start 'printing money' so to speak, and inflation became the new policy. Since then the CPI has increased by more than 800 points, 1600% more than our baseline. So if the 'Gilded Age' saw deflation of ~30% over some decades, what will historians in the future call an era of thousands of percents of inflation over some decades?
[1] - https://www.minneapolisfed.org/about-us/monetary-policy/infl...
>So if the 'Gilded Age' saw deflation of ~30% over some decades, what will historians in the future call an era of thousands of percents of inflation over some decades?
The 'Gelded Age' where the average man had his balls cut off by inflation?
> Is there evidence for this?
A simple and logical pattern.
1) Unconstrained spending without commensurate taxation leads to a required inflation of the money supply
2) An inflation of the money supply with increase the price of assets relative to the value of the currency.
3) Asset owners thus become "more valuable" by measure of currency.
4) Renters / non-asset-owners have to eat the costs of inflation while benefiting by none of the inflationary pressure on assets.
ergo - a gold standard is just a proxy for "constraints on debt" is a force that acts against inequality between asset owners and non-asset owners.
I would think it would be the opposite, as the old joke-y "Golden Rule" goes: He who has the gold makes the rules.
> 3) Asset owners thus become "more valuable" by measure of currency.
Under the Gold Standard the currency itself is also an asset, much more so than under (so-called) fiat.
In a supply-demand situation where supply is finite, and demand is potentially limitless, then the suppliers can charge higher prices. When the demand is for money itself, the price is the interest that is charged by the suppliers (lenders, financiers) can be higher.
And not just in good times when everyone is trying to get a piece of the action: the historical records shows interest rate hikes during major economic events (e.g., 1857, 1873, 1893, 1896, and 1907) when risk was higher.
> 4) Renters / non-asset-owners have to eat the costs of inflation while benefiting by none of the inflationary pressure on assets.
Inflation helps debtors:
> If wages increase with inflation, and if the borrower already owed money before the inflation occurred, inflation benefits the borrower. This is because the borrower still owes the same amount of money, but now they have more money in their paycheck to pay off the debt. This results in less interest for the lender if the borrower uses the extra money to pay off their debt early.
* https://www.investopedia.com/ask/answers/111414/does-inflati...
>If wages increase with inflation... Big "if", unfortunately.
Yup. I'm extremely unconvinced that a non-distributionary constraint (ex: limiting the money supply one way or another, i.e. the gold standard, bitcoin, etc.) fixes a distributionary problem.
You know what would fix a distributionary problem? A (re)distributionary solution.
The most obvious one is progressive/wealth taxation (a ceiling) and UBI (a floor).
Keep competitive market dynamics, narrow the window in which they're allowed to operate and add some hard constraints.
Or, if you're scared of UBI: government work programs, like the good old Works Progress Administration.
Tax, and hire millions of people for a good living wage to do things that either need to be done and aren't (infrastructure repairs and improvements, inspections of all flavors, etc), or that don't really need to be done but make some fraction of the population happy (unnecessarily beautiful post offices).
> Yup. I'm extremely unconvinced that a non-distributionary constraint (ex: limiting the money supply one way or another, i.e. the gold standard, bitcoin, etc.) fixes a distributionary problem.
Well, that's good because that's not what limiting the money supply does. It _acts as a force against inequality_. It doesn't _fix_ or _prevent_ inequality that already exists and doesn't claim to stop organic inequalities from arising - but it does put a limit on inequality resulting from an inflation of the money supply.
It doesn't act as a force against inequality though. It literally acts as a force to force the have nots to work harder and pay more to convince the haves to offer them any money for anything (whilst maintaining the purchasing power of any cash rich people that don't want to risk investing in anything that might create any wealth for anyone else)
You’re trying to make a logical argument from first principles about a complex, dynamic and ultimately social system that admits no such argument.
Historically, I'm not aware of a single major case of the Gold Standard helping with inequality.
In all cases where inequality went down, it was helped by inflationary spending.
Yet Gold Standard (and its intellectual descendants) directly led to several examples of stagnation. The most recent one was in Europe, it lost a decade of growth after 2008 by insisting on austerity.
> probably
bro your argument hinges on "probably" and then completely ignores it
Yea, that's his point. The gold standard neither prevents nor encourages inequality, except inasmuch as it limits policy flexibility (which, similarly, could be used to promote or limit inequality).
The gold standard mechanistically is a driver of wealth inequality, due to its deflationary effects and lack of a governmental mechanism to create more of it. It is not the only driver of wealth inequality, but when we used it that is what it did.
Policy flexibility is the only one of those that’s in theory responsive to democratic governance. Your opinion of whether that’s a good thing or not depends somewhat on which side of the inequality you’re on, I think.
Don’t those two data points suggest inequality is orthogonal to the gold standard?
There is an idea floating around that trade imbalances create global inequality (Trade Wars are Class Wars by Klein & Pettis) and the original sin was adopting the dollar as the reserve currency instead of something like Bancor (https://en.wikipedia.org/wiki/Bancor)
It depends on how inequalities is defined. But from the wealth distribution point of view, today’s wealth distribution skews much more towards the top. Although the lowest living standards improve thanks to the technology advancement.
Ah the classic "you have a fridge, king louie didn't have a fridge therefore in the scope of ALL of human existence you are obscenely wealthy" trope.
https://www.mediamatters.org/fox-nation/fox-cites-ownership-...
if you don't like that concept of value then let's make a new concept of value that can't be reviewed or compared through the ages -- but until then I am completely comfortable with the idea that a full detail continental map would have been invaluable to the Lewis and Clark expedition.
The trope is that having any store of value makes you wealthy; not the case : wealth is generated through financial value
Bill O'Reilly is just a pundit, not some maker of policy or human truth. He's a talking head, and not a particularly eloquent one.
The separation of wealth during the Gilded age was caused by the same thing it is caused by today: rapid industrialization. This rapid industrialization began when the US was off the gold standard during the civil war. The 1920's gilded age was fueled by fiat money, the greenback.
The great depression was triggered in part by imbalanced gold flows when we returned to gold back currencies.
https://explaininghistory.org/2025/06/12/golden-fetters-the-...
We are essentially replaying the greenback inflation of the 1860's and have been doing it since 1971.
From your linked article.
” The Wall Street Crash of October 1929 precipitated a U.S. recession, but it was the gold standard that converted this into a worldwide depression. With currencies locked to gold, there was little scope to ease monetary conditions. When the U.S. economy slumped, its import demand plummeted and it exported deflation to the rest of the world. Gold-standard countries could not respond by cutting interest rates or letting their currencies depreciate to stimulate exports – their priority was to defend the peg. As a result, economic downturns spread rapidly.”
It didn’t start with gold standard. It started with the issuance of greenbacks during the Civil War. If they never issued greenbacks during the Civil War, there would not have been an issue with going back on the gold standard.
Sorry. This is quixotic revisionism. What do you think happens during a war? Both the Union and the Confederacy were printing paper money like there is no tomorrow. In the case of the Confederacy, it was literally true.
The previous statements and yours are not in opposition. Both can be true.
> The 1920's gilded age was fueled by fiat money, the greenback.
So-called fiat money didn't become a thing until after FDR became president, which was after 1932.
> Greenbacks … a form of fiat money
https://en.wikipedia.org/wiki/Greenback_(1860s_money)
I think at this point you should read a bit more about the antebellum period.
> The separation of wealth during the Gilded age was caused by the same thing it is caused by today: rapid industrialization.
What "rapid industrialization" is happening today?
Have you lived through the late 90s big tech boom or the current AI boom?
> Have you lived through the late 90s big tech boom or the current AI boom?
Inequality (at least in the US) started growing in the 1980s, after Reagan got elected. For causes I'd start with these:
* https://en.wikipedia.org/wiki/Friedman_doctrine
* https://en.wikipedia.org/wiki/Reaganomics
> The 1920's gilded age was fueled by fiat money, the greenback.
Cite? I'm pretty sure that the 1920s, $20 was literally a gold coin of a certain size.
[flagged]
The Great Depression was caused by France panic hoarding gold https://www.nber.org/papers/w16350
Semi-ironically France was the reason the US fell off the dollar standard after it panic hoarded gold AGAIN when the French government made one last, massive purchase of gold from the US using US dollars, paying $35/oz. A French warship arrived in New York in early August 1971 to load the gold and bring it back to France.
Reckless spending post WW2 was the main reason the US shot itself in the foot and got into this position where they couldn't reasonably pay most clients back and France saw this developing.
All in all France managed to deal massive blows to the US economy covertly TWICE within the same century.
https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?art...
> The Great Depression was caused by France panic hoarding gold https://www.nber.org/papers/w16350
France was not panic hoarding anything. It was converting its UK pound-sterling holdings to gold so that it could be more independent of other countries by having its own currency better backed without an 'intermediary' conversion through London.
There was no "panic" involved, just simple fairness: if the UK and US could have physical gold in their vaults, why couldn't France?
Sorry no. France was a wreck of itself after WWI having lost an entire generation of its young men. Germany was even worse off. The US was the economic engine of the world after WWI. Despite the fact the US regulatory institutions was in its infancy. The FED at that time had no teeth. It was only after FDR became president and the continuous bank runs that the FDIC and Glass Steagall (which has been repealed) and modern banking regulations were put in effect. When the US stock market bubble popped and plunged the US into depression, it was the hard money policies such as the Smoot Hawley tariffs and Hoover’s economic hands off policies that made everything worse.
And then later in the 1930s as world gold flowed into the US (in response to the rise of the Axis) the economy began to recover here. By the end of the war most gold was in the US.
This still happens today but with instruments other than gold, right? Like foreign owned shares. Today's equivalent would be China owning all the treasury bonds.
China owns about 7% of us treasury securities and they stopped buying them I think around 2015L: https://ticdata.treasury.gov/resource-center/data-chart-cent...
The US spending more money than comes in has been the problem. You cannot blame that away.
(Don't get me wrong I am grateful that America spent billions on the CIA fighting commies and launching rockets to the moon but in hindsight that party was never going to last)
> All in all France managed to deal massive blows to the US economy covertly TWICE within the same century.
And now it seems to be the US' turn in returning the favor. First 2007ff (caused by irresponsible actors in the financial world), then the lackluster response to Covid and Russia's invasion against Ukraine, and now we're set to look at the AI bubble collapsing, a bubble much much larger than Lehman Brothers ever was.
Eh, aren't most of those points non-sequiturs?
> The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active:
And the Gilded Age [1] ended long before the gold standard. Which makes sense since the Gilded Age is a political issue not a monetary one; how will the productivity from railroads be redistributed?
> It should also be noted that the gold standard did not bring any kind of price stability:
A comparison of 35 years against 4?
That's like bragging about how smart private credit is by showing the low volatility in it's price over the past year.
The large concern from gold bugs is that by printing money we just make the next crash even larger. But of course we just print more in the next crash so it doesn't happen. Take a look at the fed balance sheet [2]; under Kaynsian ideology you were supposed to sell that off during the boom years so you can take on debt during the busts but politicians are not disciplined enough to do that so the Gold Standard would've never let them.
---
IMO, the real argument against the Gold Standard is that the US left it is because we spent more money than we made to finance the Vietnam War. If we returned to it, then we'd just leave it again when it became inconvenient. It's not the Gold Standard that needs fixing in the country.
[1]: https://en.wikipedia.org/wiki/Progressive_Era
[2]: https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
The Gilded Age was the 1870-1900, the gold standard was from 1870-1920s. Gold did not help stop inequality, and many progressive elements rallied against it when it was in effect:
* https://en.wikipedia.org/wiki/Cross_of_Gold_speech
> A comparison of 35 years against 4?
* https://en.wikipedia.org/wiki/Great_Moderation
Panics and economic downturns during the Gold Standard period were much more frequency. The term "Great Depression" used to refer to something else besides what happened in the 1930s, and the gold standard was a contributing factor to that as well:
* https://en.wikipedia.org/wiki/Long_Depression
> Take a look at the fed balance sheet [2]; under Kaynsian ideology you were supposed to sell that off during the boom years so you can take on debt during the busts but politicians are not disciplined enough to do that so the Gold Standard would've never let them.
On the Gold Standard the flexibility of emergency spending during bad years would not be possible: see 1930-1932, and then again in 1937–1938 when FDR tried to go back to balanced budgets through austerity.
* https://en.wikipedia.org/wiki/Recession_of_1937–1938
The politicians that tend to talk about "hard money" and responsible spending are the GOP—but who only seem to talk about it when a Democrat is in the White House. When their guy is in then it's all tax cuts, which do not pay for themselves:
* https://en.wikipedia.org/wiki/Kansas_experiment
and spending (see >$1T Pentagon budget(s)). They're mostly trying to roll back the New Deal (and later Great Society) and cut social programs:
* https://en.wikipedia.org/wiki/Starve_the_beast
> the gold standard was from 1870-1920s.
The U.S. officially left the gold standard on August 15, 1971.
https://blog.swissamerica.com/glossary/gold-standard/
> many progressive elements rallied against it when it was in effect:
Bryan wanted a gold and silver standard, not fiat currency. There was also the Greenback-Labor Party who wanted to get off both gold and silver standard. They favored inflation because the gold and silver backed currencies were causing deflation.
You seem to be cherry picking in hopes that people do not know the history of the time.
Bryan wanted to solve the same problem that we solve today with central banking and fiat. Basically, the gold standard limited money supply and the interest of the big money interests was to gather all of the wealth. There were no taxes or carrying costs for wealth, so that’s how they won the game.
Farmers and regular people were drowning in debt while the money shortage created a deflationary cycle.
Silver is more plentiful and more volatile - Bryan wanted a fixed 16:1 ratio with gold.
The magic of fiat is that as long as you have working governance, modest inflation and plentiful credit equals prosperity.
> Bryan wanted a gold and silver standard, not fiat currency.
Yes, but what does "bimetallism" mean?
> The Cross of Gold speech was delivered by William Jennings Bryan, a former United States Representative from Nebraska, at the Democratic National Convention in Chicago on July 9, 1896. In his address, Bryan supported "free silver" (i.e. bimetallism), which he believed would bring the nation prosperity.
* https://en.wikipedia.org/wiki/Cross_of_Gold_speech
> Free silver was a major economic policy issue in the United States in the late 19th century. Its advocates were in favor of an expansionary monetary policy featuring the unlimited coinage of silver into money on demand, as opposed to strict adherence to the more carefully fixed money supply implicit in the gold standard.
[…]
> While all agreed that an expanded money supply would inevitably inflate prices, the issue was whether this inflation would be beneficial or not. The issue peaked from 1893 to 1896, when the economy was suffering from a severe depression characterized by falling prices (deflation), high unemployment in industrial areas, and severe distress for farmers.[1] It ranks as the 11th largest decline in U.S. stock market history.[2]
[…]
> As a result, the monetary value of silver coins was based on government fiat rather than on the commodity value of their contents, and this became especially true following silver strikes in the West, which further depressed the silver price. From that time until the early 1960s the silver content in United States dimes, quarters, half-dollars, and silver dollars was worth only a fraction of their face values.[10] Free coinage of silver would have amounted to an increase in the money supply, resulting in inflation.[3]
* https://en.wikipedia.org/wiki/Free_silver
Hard and soft money exists on a spectrum, and it seems to be that "free silver" is a move away from hard and towards soft/fiat, and more monetary flexibility.