by Rod D. Martin
April 4, 2006
Some friends of mine published an article online today stating that the gold standard is necessary both economically and Biblically. The argument is (very briefly) that since the Bible requires honest weights and measures, our modern system of floating currencies is inherently sinful, and only gold can fix this.
Now I certainly have any number of problems with our monetary system, most notably its chief distinguishing feature: the government monopoly on money through the central planning agency of the Federal Reserve. Opposing this sort of socialist boondoggle is something of an ancient national avocation in America, attracting (with varying degrees of heat) men from Milton Friedman to Andrew Jackson to Thomas Jefferson and James Madison (Jackson had the joy of actually killing one of the Fed’s predecessors, the second Bank of the United States).
But the current system is really not the point. The gold standard is an extremely bad idea. And there’s one very simple reason why.
Space is full of the stuff. And we’re finally going there in a big way. I have a friend who started a space launch company three years ago. He’s put $100 million into it so far, he’s designed the first completely new rocket engine in three decades, tested it, and launched it. He’s got launches booked with paying customers through 2010. And he’s cut the price to launch a satellite from NASA’s and Russia’s $83 million/per to just $6 million.
That’s more than an order of magnitude. He also has a manned spacecraft prototype done, and he’ll be in that business by the end of the decade.
Likewise, when Sir Richard Branson announced his “Virgin Galactic” spaceline — based on the SpaceShipOne platform which won the Ansari X Prize last year — he sold out every ticket available for years going forward within just a couple months. That’s oodles of people paying $280,000 a pop to go suborbital: they aren’t even really going anywhere! Dubai is building a commercial space port and resort, and New Mexico is opening its own commercial space port as well.
The point is, suddenly the free market is working and everyone’s jumping in. With the new scramjet technology America, Russia, China, Japan and Australia are all racing to implement (and Australia just tested their scramjet in flight again the other day), getting to space is going to be dirt cheap before we know it (no sooner than the 2020s, of course, but we’re speaking in relative terms). And there’s plenty of demand to go, and lots of billionaires already planning to build space Hiltons and such.
Now: getting to space is virtually the whole cost of space flight. Once you’re there, everything’s super cheap: it’s all about Newton’s Second Law then. You can go anywhere you want for virtually no additional cost. And major mainstream publications are beginning to note that even some of the smaller near-Earth asteroids (some of which pass closer to Earth each year than the Moon) contain metals worth more than the entire GDP of the United States.
So tell me: when we start bringing back more gold — sometime mid-century — than the Spanish ever dreamed of in Mexico and Peru, how are we not going to see a price collapse? And how would a gold standard not produce the exact same devastating effects which brought on seven Spanish royal bankruptcies in the two centuries following Columbus?
A metallic standard requires a high degree of constancy in the metal’s supply, and predictability in the rate of that supply’s growth. When there’s a huge influx, you get a disaster. And it’s exactly that sort of “rubber yardstick” which my friends’ article (and Scripture) decries.
So isn’t it time that Christians and other gold bugs figured out a better way to accomplish their (very worthy) goal? Because if they got their way as things stand, they’d be getting it just in time to discredit themselves and much of what they believe — far beyond just gold — more or less forever. Short-sightedness, not to mention complete obliviousness even to those things going on all around you right now, is a poor advertisement for one’s worldview; and America has too many blind guides as it is.
The answers are not in some mythical past (Spain repeatedly collapsed its currency as Mexico and Peru mushroomed supply of the precious metals). Technology, like sanctification, is progressive: it allows for better answers, and better application of old principles, tomorrow than today.
Isn’t it time we started remembering that?