Law, Legislation, and the Gold Standard
26 Pages Posted: 17 Nov 2014 Last revised: 18 Dec 2014
Date Written: November 18, 2014
I distinguish between a gold standard founded on custom-based or “private” law, and one resting upon statute or “public” law, that is, on government legislation. I then argue that the development and flourishing of the historical gold standard depended crucially upon its moorings in customary law, and that the shift from those moorings to legislative ones were the fundamental cause of the gold standard's downfall. It follows that a revived gold standard based upon legislation rather than customary law is also unlikely to endure. Because a spontaneous gold standard revival is itself unlikely, the overall prospect of a return to gold-based payments would be dim even supposing that the goal itself were popular.
Keywords: gold standard, common law, Hayek
JEL Classification: E42, K12, N21, N22
Suggested Citation: Suggested Citation