There was once a sector of the monetary reform debate generally associated with supply siders that favored a restoration of Bretton Woods. Under this system, the dollar would be loosely tied to gold but not domestically convertible. Gold would operate more as a signalling device and an anchor of sorts, like an inspiration to governments to be behave. The problem is that a second try at this system would be no more successful than the first try after World War II. It didn’t provide the discipline to stop abuse throughout the 1960s and it ultimately collapsed.
Regardless, this supply side position seems to be a thing of the past. Steve Forbes himself is following the intellectual trajectory of Hayek, who finally concluded that the only hope for sound money rested in smashing the government monopoly itself through the repeal of legal tender laws.
In this excellent Forbes column, he favors a stricter gold standard and pushes for total repeal of limitations of trading any existing currency or newly created currency. He decries the jailing of monetary entrepreneurs. He concludes:
“There is something big that could be done simultaneously to get the golden ball rolling: remove legal barriers to alternative, nongovernment currencies in the U.S. We are allowed to use pounds, yen, euros and any other currency to carry out a transaction. Why not allow metal-based or -backed currencies to be used?… The combination of getting a serious debate on the gold standard going and sweeping away our legal tender laws barring competitive domestic currency would hasten the day that we’ll once again have a gold-based currency like that which did our country so much measurable good for 180 years.”
I had detected this change in the course of his writings and asked him about this at this past summer’s FreedomFest. He confirmed that he had come around completely. The government cannot be trusted with a money monopoly or any form of paper currency. This is a huge and important shift for him.
It’s striking that since Ron Paul left the presidential race, all public discussion of monetary reform has ended. That makes it all the more important that private voices continue to push and explain. This is why the Laissez Faire Club is releasing a new edition of Ron Paul and Lewis Lehrman’s The Case for Gold, with a long and penetrating new introduction by Ron Paul. This will be a Club release later this year.