The Fundamental Things Don't Change As Time Goes By

by Ralph J. Benko: Historian Pierre Vilar's A History of Gold and Money: 1450 - 1920 (NLB, 1976, Verso edition 1984) observes, in his concluding section (p. 344 - 345):
"Historical reality is again and again caricatured by saying that gold is the currency of a former age; that it has nothing to do with modern money. Historically speaking, nothing is further from the truth, as neither gold nor silver was ever the only form of 'money'. If in the course of history there have been changes, devaluations, attempts at currency deflation and the like, this is because the ratio of circulating currency to the internationally valid currency of standard weight, has constantly been in flux. Most circulating currency has been virtually 'fiduciary' (its stability vis-a-vis gold and commodities in general depending on the confidence of the public had in it). Such money, which depended on the domestic conditions of the country where it circulated could never be confused with the international currency. This often created problems similar to those of modern inflation.

"Credit and 'book money' are not recent developments either. In the 16th century more transactions were paid for in the account books of the great fairs than were paid in gold and silver: only the balances were paid in precious metals. It would therefore be quite wrong to counterpose some imagined age of metal currency, presumed to cover the whole of previous history, to a period of modern currency which began at some point in the 1920s."The fundamental things don't change as time goes by.
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Ralph Benko is senior advisor, economics, to American Principles in Action’s Gold Standard 2012 Initiative, and a contributor to the ARRA News Service.

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