The Case for a 100 Percent Gold Dollar

When this essay was published, America was in the midst of the Bretton Woods system, a Keynesian international monetary system that had been foisted upon the world by the United States and British governments in 1945. The Bretton Woods system was an international dollar standard masquerading as a “gold standard,” in order to lend the well-deserved prestige of the world’s oldest and most stable money, gold, to the increasingly inflated and depreciated dollar. But this post-World War II system was only a grotesque parody of a gold standard. In the pre-World War I “classical” gold standard, every currency unit, be it dollar, pound, franc, or mark, was defined as a certain unit of weight of gold. Thus, the “dollar” was defined as approximately 1/20 of an ounce of gold, while the pound sterling was defined as a little less than 1/4 of a gold ounce, thus fixing the exchange rate between the two (and between all other currencies) at the ratio of their weights.