AU REVOIR, GOLD STANDARD: Crowd Crowns Gold a Symbol, Not a Currency, and the Abolitionists Take Silver

The verdict is in, and gold has been politely shown to a seat of honour where it can no longer touch the controls. Asked which stance on gold best reflects modern monetary views, the crowd has chosen "Symbolic metal only": gold as heirloom, ornament and reassurance, not as the leash on a nation's money supply. It is a quietly radical ruling, because it refuses both the nostalgia of the goldbugs and the iconoclasm of those who would melt the whole idea down.

The background helps explain why. According to the IMF, gold sits so prominently on central bank balance sheets mainly because of the institutional and historical legacy of the gold-standard era and the postwar arrangements that followed, not because of some timeless monetary logic. The same note treats gold as a reserve asset with no credit risk that is also highly volatile, offers only conditional hedging benefits, and is poorly suited to the most liquid part of reserves. Even under Bretton Woods, an IMF working paper reminds us, only the United States promised to convert dollars into gold on demand for other central banks, which already made it a far looser chain than the classical gold standard.

The economists have been blunter still. In a 2012 IGM panel poll of dozens of prominent US economists, not one believed a return to the gold standard would improve price stability and employment, Wikipedia's summary records. That is about as close to unanimity as the dismal science ever gets, and it frames the crowd's choice neatly: the argument is no longer whether gold should run money, but whether it should keep even a ceremonial chair at the table.

On that narrower question, the opinion markets on Morfi have spoken. "Symbolic metal only" finishes with 50% consensus, ahead of "No role for gold" at 31%, with 2 other sides trailing behind. 24 traders put $75,378 behind their convictions in less than a day of trading, and the fight moved fast: as my colleague Penny Sterling reported when the market opened, the crowd first showed the metal the door before settling on a gentler eviction notice.

Here is my opinion, offered with the earnestness my students find exhausting: the crowd has found the liberal middle, and the liberal middle is right. Locke taught that legitimate authority rests on consent, and modern money rests on exactly that, on democratic institutions, independent central banks and the rule of law, not on the accident of how much yellow metal lies under a particular country's soil. Tying a currency to gold hands policy to geology; banning gold from the story pretends history never happened. Let it glitter in the vault as a reminder of where we came from, and let accountable institutions decide where we go. And note, as a Federal Reserve paper finds, that central bank gold buying is generally not linked to de-dollarization except in a few prominent cases, so the panic merchants can stand down.

What to watch next: whether rising gold prices keep feeding politicians who want gold-backed money back on the ballot, and whether the abolitionists in second place regroup to argue that even a symbol is one symbol too many. The market remains open to anyone who thinks the crowd has it wrong. Join the market on Morfi, back your view with conviction, and remember that in a free society the best answer to a bad argument is a better one, ideally with money on it.