Going for the Gold

The Republican Party’s 2012 platform calls for the establishment of a “Gold Committee,” to explore ways of returning to the gold standard. It would also call for or conduct an audit of the Federal Reserve.

The gold standard has been a favorite hobby of the GOP, off and on, for many years. The last gold lunacy flare-up was during the Reagan administration. Reagan, partly due to the influence of Jack Kemp, believed that we should return to the gold standard. Kemp was in turn a strong influence on the young Paul Ryan, himself a devotee of Ayn Rand and her fantasy of “objective money.”

In the 1950s, conservatives also called for a return to the gold standard and demanded an audit of Fort Knox, which I argue in in my book Face Value was never anything more than an elaborate public relations scheme anyway. There are many dozens of economic reasons why it’s a terrible idea. Here I’m offering reasons of a different kind.

The gold standard has never been simply about gold, or simply about money: it’s always been about the fantasy of a natural and just hierarchy, a world in which wealth would equal merit in a 1-1 ratio. The gold standard is a dream of certainty in exchange, and perfect stability in meaning. But exchange itself is always slippery, and the slipperiness of exchange haunts our language itself. There are many things wrong with the gold standard, but we can’t even really even talk or write about it in the way goldbugs desire.

Consider the linguistic affinity between “solvent” as in “financially sound,” and “solvent,” as in a chemical that dissolves other compounds, “a solvent.” Solvents break things down, as acetone dissolves nail polish or plastic. But someone who is financially solvent is secured from the corroding effects of money, indissoluble. The word “insolvent,” describes someone who is being washed away by commerce and bad fortune, or dissolving under pressure of debt: “insolvency.” But money, which makes one financially solvent, is itself a solvent. Money erodes tradition, remakes social place and reshapes the landscape itself. It’s probably the most powerful solvent of all. Why the confusion of meanings?

The Oxford English Dictionary places the root in the latin word solvens,  to solve. It makes sense: someone who is “insolvent” presents a financial problem in the process of being solved. But no one would say that a bankrupt person is “solvent” because his insolvency ended in his being broke. Someone else’s financial problem was solved, not his. Someone who’s “solvent” has solved one of life’s more pressing problems, but the whole point of being solvent–having money–is that you can use $50 to dissolve the difference between an hour of work and a shirt or a meal or a tank of gas. Being “solvent” means you can use money as a solvent.

Money itself is solvent of meanings–it dissolves them into each other, so that your hours of work turn into multiple goods and services–someone else’s labor, or cabbages or whiskey or children’s shoes. It dissolves social position or strengthens it.

This might seem like a shallow comparison, making play of a coincidence. But I’d argue it’s not a coincidence, it’s an artifact of the aporia of exchange itself. In exchange two different things briefly become equal, then emerge on the other side as different again. X hours of labor turns into a loaf of bread; a jug of olive oil turns into a pair of sandals. Exchange is a process whereby apparently solid meanings momentarily dissolve, then coalesce again into more solid form.

Consider the commonality between a bank teller and a fortune teller: both jobs grow out of guessing the future and trying to secure an advantage over uncertainty. Both terms originate in telling, telling you the facts so you can rig the future. Many people have commented on how often banks look like temples: at one time in western history markets and temples were nearly inseparable, because exchange was magical, a process whereby one thing turned into another. In the Roman forum, the temple and the market were practically the same place. When Christ drove the money changers from the Temple, you could argue he wasn’t condemning greed, he was inventing economics as a realm of study distinct from religion. Today, although we think religion has little place in a bank, the temple-like form persists.

It’s worth looking at the language of money, because language itself is like money: it circulates, it enables the exchange of ideas; you “coin a phrase” and it passes; it acquires value as others use it. Language is negotiation over meanings and over “values.” And like language, money is never the same as the thing it describes. The word “cat” is not a cat: it generically describes every house cat you ever saw as well as a “cat ” you imagine in your head as you say the word. There is no real cat; no vault somewhere with the “cat standard” stored therein. There are only animals described as cats, all of which are different and also the same. Language is both a tool of negotiation, of ambiguous meanings, and strategy for fixing meanings, both “solvent” and a solvent, like money.

The idea of returning to the gold standard is an idea of returning to a degree of certainty that language itself doesn’t support. So good luck with that platform, GOP!

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