Aristotle would have supported the gold standard

Although Aristotle lived over 2000 years ago, he had ideas about money that are extremely relevant to today. He believed that rather than having some intrinsic worth, money was a human convention that enabled coordination between people. He also believed that money was best used to satisfy needs rather than wants, which he made it difficult to distinguish between. Additionally, he thought that it was wrong for money to make money. Although this would contradict most of the practices of the modern financial system, it would also reflect on the US government’s issuance of currency. Rather than there being some fundamental right of government issuance, Aristotle saw money as serving a very specific purpose. Constant and unpredictable inflation in the dollar would have made Aristotle wonder why we hadn’t simply switched to something that fulfilled the purpose of money better. The dollar has been repeatedly used to enable the purchase of wants while neglecting needs, reversing Aristotle’s prescription. The issuance of currency also provides the US government with money to spend and goes beyond profiting from deposits to profiting from devaluing deposits.

Aristotle’s focus on money as a medium of exchange would have made him a strong advocate of monetary stability. Money only functions as a medium of exchange because of its stability. Bitcoin would be seen as a poor currency by Aristotle because of how unstable it is, and most modern currencies would also be seen as inefficient because they made it difficult for people to coordinate effectively through constantly adjusting price. Although gold is not perfectly stable, it is not arbitrarily unstable, and if used widely enough, would be far more stable than our current fiat currency options. The ability of gold to be used across cultures and regulatory boundaries makes it even more obvious that Aristotle would support the use of it. Rather than just promoting coordination between people in one town, gold can allow it across the whole world. Gold is the ultimate medium of exchange and that hasn’t changed since the time of Aristotle. Gold removes the barriers constructed between different states and countries. It is truly a universal medium of exchange. Money controlled by the state has an inherent incentive to inflate which obviously makes coordination difficult and lets only the wealthy be resilient to price shocks.…