The mythology of gold really grew up with Keynes and the quantity theory. Here are six of those myths: the gold standard is unable to accommodate the needs of an growing economy; the quantity of money is arbitrarily determined; the gold standard is a government price fixing scheme; the gold standard subjects a country to alternating inflation and deflation; the gold standard requires high costs devoted to resources; and the gold standard results in high interest rates.

10. The Gold Standard in Theory and Myth

Joseph T. Salerno presents a series of ten formal lectures on topics related to the history and theory of the Austrian School of Economics.
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Although often neglected by the English-speaking world, the French Liberal School of the nineteenth century has long provided a robust foundation for modern laissez-faire economics and the pro-freedom ideology we now sometimes call libertarianism.

Forerunners of the Austrian School: The French Liberal School

Friedman’s book, Monetary History of the United States, tried to show the depression was caused by a deflation of the money supply by the Fed. Rothbard’s America’s Great Depression was published the next year in 1963. Rothbard argued that the Fed was actively inflating the money supply. 

9. Money and Gold in the 1920s and 1930s: Defending the Rothbardian Position

The debate still continues. It is all about Mises’ initial article and then book on Socialism in 1922. He demonstrated the necessity of the price system and showed how subjective values were transformed into objective prices which could be used as meaningful cardinal numbers in economic calculation. 

8. The Debate on the Socialist Calculation Debate

The founder of the Chicago School, Frank Knight, was an avowed egalitarian. Rousseau was his influence. Jacobins believed in mass democracy and politics as the only way to implement their ideas. They hated aristocrats and religious leaders. Knight believed in progressive taxation. He wanted neocon social democracy. 

10. The Gold Standard in Theory and Myth

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