George Selgin: evaluation

Transcript context

…Your money views have a lot of government in them. There’s no gold standard. It’s a government paper currency. It’s a government-run computer. It runs monetary policy. That’s true, but that was true from the beginning, too. Like I said in my first book, I assume you can’t . . . I like the gold standard. I thought the pre-World War I gold standard was amazing. It’s the best monetary system we’ve had. If it didn’t always look great, as was the case in the United States, for example — where we had crises — if you do the research, you’ll see that that was because of the specific dumb regulations in those countries that had a lot of problems, mainly the US and England. Anyway, a gold standard was great, but I don’t think you can get that genie back in the bottle. I just think it’s impossible for the most obvious reason. Once governments are involved in the gold standard, once you have a central bank, then if it breaks its commitment — which of course they all have, all the ones that once were tied to the gold standard — then they can’t establish a credible commitment again to have convertibility to gold. The way I sum it up is, if tomorrow the Federal Reserve said, “Okay, you can have so many ounces of gold for every so many dollars,” a wise public, I think, myself included, would go tomorrow and take the gold just in case, and that would be the end of it. I don’t think you can recreate. The problem is you’ll say, “Well, okay, we don’t have to have a central bank.” But you do in the sense that switching monetary standards is like trying to switch which side of the road you drive on. You need somebody to coordinate it to make it happen because people don’t do it all by themselves. That’s why Bitcoin isn’t taking off as a general medium of exchange, whatever its virtues might be, for example. We have this network problem. If the government doesn’t deliberately create a gold standard, it’s unlikely that we’ll spontaneously go there, but if the government did deliberately create a gold standard, it’s unlikely we would trust it. That’s my big problem with gold standards. Last two questions before we go to audience questions. First, living in Andalusia, what’s been your biggest surprise?…

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