In a fascinating exploration of alternative history, The Gold Standard by Saifedean Ammous imagines a world where decentralized gold prevented the horrors of World War I. The author, known for his influential book The Bitcoin Standard, delves into how a decentralized monetary system could have averted one of the most catastrophic events in human history.
The Problem with Fiat
According to Ammous, the 20th century was marked by an unprecedented transfer of wealth from producers to the machinery of war, all facilitated by the fiat monetary system. “The 20th century is just an enormous amount of wealth being taken away from people who produced it and being sent to the meat grinder of war. And this is what fiat does,” he told Cointelegraph. Ammous argues that without fiat, the world would see less violence, more prosperity, and greater economic stability.
The Gold Standard and World War I
In The Gold Standard, Ammous envisions a world where a decentralized form of gold, delivered by a fleet of innovative planes, could have changed the course of history. The book sets the stage at the end of the Belle Epoque, a period of relative peace and prosperity in Europe from 1871 to 1915. However, the rise of central banks and irresponsible monetary policies set the stage for the Great War.
The Alternate History
In this alternate timeline, French aviator Louis Blériot and the Wright brothers form the Blériot Transport Corporation (BTC) in 1915. They create a fleet of advanced planes that deliver gold directly, bypassing central banks. As the war raged, demand for this decentralized gold increased, leading to a capital flight that drained the central bank vaults of the belligerent countries. By early 1915, the war is effectively ended, and peace breaks out in Europe.
The Treaty of Geneva and the ICSD
The end of the war is codified in the Treaty of Geneva and the establishment of the International Committee for Self-Determination (ICSD). This new world order, underpinned by a decentralized gold standard, leads to unprecedented prosperity in the 20th century. The concept of hypergoldenization—where the value of gold appreciates significantly—becomes a reality, and the need for central banks to finance wars diminishes.
A Brave New World
In this alternate history, the rise of socialism, World War II, economic depressions, and even climate change are avoided. The Smith family in London, featured in the book, live in a world of comfort and prosperity. Technology has shortened chores, meat is plentiful and affordable, travel is fast, and energy is abundant. The tribal considerations of nationality, ethnicity, and religion become less significant as people choose to live under governments that provide the best services at the lowest cost.
Critiques and Credibility
While the book is a compelling thought experiment, some aspects strain credulity. For instance, the advanced planes in the BTC fleet far outstrip the technology of the time, and the peaceful resolution of the war and the absence of succession conflicts seem overly optimistic. However, Ammous aims to make the narrative tenable and credible, allowing readers to think deeply about the implications of a decentralized monetary system.
From Gold Bug to Bitcoin Advocate
Ammous’s journey from a gold bug to a Bitcoin advocate is well-documented. He first delved into Austrian economics in 2007 and became an advocate of sound money. His exposure to Bitcoin in the context of hard money led him to write The Bitcoin Standard. In The Gold Standard, he applies his understanding of monetary systems to explore a pivotal moment in history, offering a unique perspective on the potential of decentralized finance.
Conclusion
The Gold Standard is more than just a historical fiction; it’s a thought-provoking exploration of how monetary systems shape human history. By imagining a world where decentralized gold stopped World War I, Ammous challenges readers to consider the profound impact of financial systems on global peace and prosperity. As we continue to navigate the complexities of modern finance, the lessons from this alternate history offer valuable insights into the future of decentralized monetary systems.
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