As a long time D&D and video game player, I am quite comfortable with using gold and silver coins as currency. While I normally use this imaginary loot to buy things like magic weapons and healing potions, I’m sure I can easily make the switch to buying gas and groceries with such coinage. If South Carolina representative Mike Pitts has his way, his state will switch to the same currency system used by Middle Earth and Azeroth: gold and silver coins.
Pitts seems to have three main reasons for his idea. First, he seems to hold that the replacement of gold and silver coins by Federal Reserve Notes is unconstitutional.
However, he seems to be mistaken about this. The federal law that allows the use of such notes seems to fall clearly under the Commerce Clause. Of course, an amendment could change that.
Second, he contends that if the federal government continues to spend and print money at its current rate, it will collapse the economy. He uses the examples of Germany in the 1930s and the Soviet Union to support his view.
While his claim does have some appeal, the failures of the German economy and the Soviet Union were not due to their failing to use gold and silver as their currency. While spending was clearly a problem, it seems unlikely that using gold and silver currency would have prevented their problems. Also, Germany did not recover by adopting gold and silver currency. As such, while he does have a reasonable point that over spending is economically problematic, it does not follow that gold and silver currency is the solution.
Of course, it could be argued that gold and silver currency would reduce spending. After all, the supply of gold and silver is limited and hence the spending would have to end when a government ran out of gold and silver. Of course, there is the problem of getting enough gold and silver to pay for needed services (like defense and infrastructure) and working out a economic system for the digital age based on currency from the iron age. While this might be possible, it seems likely that it would be rather challenging and it is not clear that a gold and silver based system would solve the economic woes.
Third, he notes that when the collapse comes, his state would be better off with hard currency that can be carried and bartered. After all, paper money from the federal government will be worthless then.
He does have something of a point here. After all, if the economy did collapse and paper money became worthless, people would probably revert to a barter based economy. People might accept gold and silver as currency-after all, a collapsed economy would probably create a situation comparable to certain times when gold and silver coins were used as currency. Of course, if it comes to that, then the most valuable barter items will probably be bullets and guns-one barters by getting people to hand over stuff in return for not shooting them.
This, of course, assumes that such a collapse will happen-which is quite an assumption. While an economic collapse is always a possibility, it seems to be an unlikely one. That said, perhaps it is time to start stockpiling weapons, ammunition and survival rations.
So, should we switch to gold and silver? If so, how will we get enough to run a world economy and how will the practical and theoretical problems be solved? Then again, it would be kind of cool to swagger into the local tavern, broadsword at my side, to slam a few gold coins on the bar and then demand a pint of ale and the location of the nearest dragon.