Ted Cruz is campaigning on the gold standard. He is smart to do so.
In Forbes.com, commentator Nathan Lewis notes that notwithstanding the claim that there is an elite academic economic consensus against the gold standard, the reality is far different:
“There is far less disagreement among scholars, however, on the question of [monetary] regime outcomes. One is struck by the near consensus in the historiography on the gold standard that the period [1880-1914] produced international regime outcomes which were highly desirable. Kenwood and Lougheed (1983) state that ‘one cannot help being impressed by the relatively smooth functioning of the nineteenth-century gold standard.’ They add that its external adjustment mechanism ‘worked with a higher degree of efficiency than that of any subsequent international system.’ Ford (1989) calls it ‘a system more stable perhaps than anything seen since.’ Cohen (1977) sees it as an international monetary regime that marks a ‘Golden Age’ in the history of monetary relations. He emphasizes how ‘enormously successful’ it was ‘in reconciling tensions between economic and political values.’ Beyen (1949) underscores the extent to which it has become perceived as ‘one of the world’s most prosperous and “normal” periods.’ Cleveland (1976) offers extensive praise of the relative performance of this regime, calling it a period of unmatched ‘harmony’ in monetary relations. Keynes (1931) noted that ‘the remarkable feature of this long period was the relative stability of the price level.’ Triffin (1964) points out the gold standard ‘provided a remarkably efficient mechanism of mutual adjustment of national monetary and credit policies to one another.’ Maier (1978) calls it a ‘smoothly running’ system. Strange (1988) refers to it as ‘an island of relative order and stability.’ Yeager (1976) stresses how the desirable regime outcomes of the gold standard imparted a vision on monetary relations of the period as the ‘good old days’: something long gone but venerated nonetheless.
Cruz’s support for the gold standard has excellent academic, as well as political, grounding.
Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics.