Impending Social Strife?

By Ron Paul

The greatest threat facing middle and working class Americans is our depreciating paper currency.

At least when the kings of old debased their coinage, by adding copper to the precious metal, there was still some objective value to the resulting money. But as economist David Ricardo observed almost two centuries ago, when money costs nothing, it will become worth nothing.

"Government," said Ludwig von Mises, "is the only agency that can take a useful commodity like paper, slap some ink on it, and make it totally worthless."

Today, thanks to 67 years of central bank control over the money supply, we face an economic and political crisis greater than any we have faced before.

We probably will see widespread civil disorder in the 1980s, as a direct result of our faltering economic system. The dollar has been damaged by decades of interventionism, and Congress has legitimized depreciation of the dollar and forced redistribution of wealth through corporate and social welfare schemes.

All aspects of the interventionist system threaten freedom and social peace, but money is the major issue, since it is the lifeblood of all economic transactions. If we are to reverse the trends of the past six or seven decades, honest money and monetary debasement must become top concerns of ordinary Americans.

The late Martin Gilbert, head economist for a Swiss bank, was a convert to the gold standard. Among his employees was a young manual worker. "Once a month," said Gilbert, "he took part of his pay and bought a gold coin for his wife. I remonstrated with him about it once, and he said, 'Look, don't you Americans come over here and try to tell us how to live. I go home and I give that coin to my wife, and I tell her, "If something happens to me, and to the bank and all the governments, you can go into the countryside and give it to a farmer, and with that coin you can eat for a week."’ I came around to the opinion that he knew something I didn't know."

This article was excerpted from the booklet Gold, Peace, and Prosperity, copyright © 1981 by the Foundation for Rational Economics and Education, Inc. Permission to quote from, or to reproduce liberal portions of, this publication is granted, provided due acknowledgement is made.