Interestingly, when Spain looted the New World of gold and silver, it did not make Spain any wealthier. The result was just inflation - the gold was worth less. The more gold that was imported, the lower the value the gold had.
It's just like the government deficit printing fiat money.
I prefer my society to allocate valuable goods and services to those who are contributing positively to it today over those who had the luck to be born earlier and/or to wealthy families, so a stable but nonzero inflation suits me very well thank you.
Compared to the horror stories of the gold standard days? Yes. 0% -> 5% overnight is not nothing but it compares favourably to most assets one could pick.
Edit in response to your undeclared edit: inflation hurts those who hold cash, by its very nature; on average inflation is a transfer of real value from the rich to the poor, although of course there will be exceptions.
The fact of the matter is that the ability for the government to print money when needed and not be beholden to a scarce element for currency and wealth reserves has allowed our economy (and the world economy, and trade) to grow. If there is no 'extra' money when we need it, economies stagnate. The side-effect of 'extra' money is inflation. However, I think that we have a lot to show for it -- considering that economic disasters haven't completely destroyed the wealth of entire generations of people since we started doing it this way, and we have a least a passable system of class mobility.
This whole 'pining for the gold standard' is ridiculous. Do you want to go back to zero-sum economics because you don't like the Fed? Everyone hates the Fed, but it happens to be the least bad option that we have come up with so far.
If you don't think the US economy didn't grow enormously from 1800-1914, what can I say?
> If there is no 'extra' money when we need it, economies stagnate
The banks create money as needed through supply & demand. This is complex subject, but the fact that the US economy thrived from 1800 to 1914 shows your dire predictions to be simply lacking.
> class mobility
Was very robust in the 1800s. The US moved scores of millions of people from poverty into the middle class, and a lot into the wealthy class.
May I recommend reading some history books about 19th century America.
> it happens to be the least bad option that we have come up with so far.
Your dire predictions didn't happen in the 19th century, and we didn't have endemic inflation.
There were huge economic busts in the 19th and first half of the 20th. They made the 2008 crisis look like nothing. You glorifying the gilded aged is quite alarming.
When you read history do you skip over the parts that don't agree with your philosophy, or do you just assume you would be one of the robber barons?
Also, our economy grew a lot in a large part because we expanded westward exterminating the people who lived on the land and taking it from them and all the resources underneath. We got a lot of that 'extra' money as gold from that expansion.
> You glorifying the gilded aged is quite alarming.
LOL. Read "Historical Statistics of the United States". You can download it for free from archive.org.
> our economy grew a lot in a large part because we expanded westward exterminating the people who lived on the land and taking it from them and all the resources underneath
So "we" stole railroads and steel mills and factories and shops and mills and textiles etc. from the Indians?
> We got a lot of that 'extra' money as gold from that expansion.
Spain looted enormous quantities of gold from S America and transported it to Spain. Did it turn Spain into a wealthy industrial powerhouse? Nope. Is Russia's oil extraction industry making Russia an economic powerhouse? Nope again. How about Saudi Arabia? Nope nope nope. Venezuela? Nopety nopety nope.
What theory are you speaking of? My point was that you claim that the USA was better off under the gold standard economically. We weren't -- we were subject to incredibly large booms and busts. Just because there was a railroad boom doesn't mean there wasn't a bust.
The ability to control boom and bust cycles by messing with the money supply is the whole point. Of course the gold standard is awesome if we ignore the busts and only look at the booms.
Regarding the Spanish -- I fail to see how that refutes anything? They were a poorly run religious monarchy operating in the pre-industrial age. Cool. What's your point? Are you contending that vast amounts of free land are not conducive to rapid economic expansion under capitalism?
> The ability to control boom and bust cycles by messing with the money supply is the whole point.
Except they're a failure at it. We have boom and bust cycles anyway. Remember 2000, 2008, 2022? Friedman also demonstrates in "Monetary History of the United States" that the hand of the Fed on the tiller results in less stability of the money supply.
The "whole point" of fiat money is to be able to spend money without having to tax it first. That's why the European powers adopted it in WW1 - to finance the war.
> I fail to see how that refutes anything?
It refutes the notion that the quantity of gold in an economy has anything to do with prosperity.
> free land
Why have Japan, Taiwan, Hong Kong, S Korea, and New York City become economic powerhouses despite little or no land?
> Except they're a failure at it. We have boom and bust cycles anyway. Remember 2000, 2008, 2022?
Those cycles weren't nearly as bad as the ones that came before it.
> The "whole point" of fiat money is to be able to spend money without having to tax it first. That's why the European powers adopted it in WW1 - to finance the war.
Sure. You haven't explained why this is bad except 'inflation'. I think inflation is a small price to pay for relative stability.
> It refutes the notion that the quantity of gold in an economy has anything to do with prosperity.
No it doesn't. It illustrates that idiotic people with a lot of resources can do stupid things with them.
> Why have Japan, Taiwan, Hong Kong, S Korea, and New York City become economic powerhouses despite little or no land?
Poor people do become rich, but that doesn't refute that it is a lot easier to become rich(er) when you already have a lot of money.
It's just like the government deficit printing fiat money.