Gold: The Once and Future Money by Nathan Lewis
A Froogal Stoodent review
Seventh in a series of book reviews by The Froogal Stoodent
If you're interested, you can find this book at Amazon.
When I picked up Gold: The Once and Future Money, I thought it was going to be 400 pages on why gold is the only real form of money. *rolls eyes*
Instead, it was a 400-page macroeconomics textbook in disguise.
I can usually read a novel in a day. A typical nonfiction work with some seriousness and depth might take me three days or so.
This book took me almost two weeks.
It was a lot to digest, and I lack sufficient economics background to really be able to parse Lewis' arguments. So I can't tell you whether or not he's right. But he makes a number of interesting points in support of his views.
This book had two main arguments:
- Currencies should be on a gold standard, because gold is the ultimate yardstick of value. Not a perfect yardstick, but the best one by far--and it has been across the entire course of recorded human history.
Given the title, I was pleasantly surprised that he did not advocate a strict standard of 1:1 redeemability (that is, every dollar printed has an equivalent amount of gold sitting in reserve).
Instead, Lewis advocates a much more modern formulation, something closer to the standard that was in effect at the beginning of the 1900s. He even observes that you could support this sort of standard even with no gold reserves at all!
He's right, but I was surprised that the author of a book with this title would be willing to say such a thing. I guess the old saying is true: you really can't judge a book by its cover! [Or its title...]
On this point, I have no qualms. I especially liked the notion that gold is a yardstick; a measure of value. I think that's a really productive way to think about the role of gold.
- Lower taxes (and tariffs and so forth) yield economic growth, and taxes should always be minimal, simple, and as low as possible to support whatever programs the populace desires.
This point seemed a little oversimplified and dogmatic, though Lewis presented numerous case studies that made for a compelling argument. My comparative ignorance of economics and history means I can't cite any examples to disprove his thesis, and I'm not inclined to go searching. After spending nearly two weeks on this book, I think I'm done with macroeconomics for a while!
However, it makes me wonder: if he's correct, why has history seen so many attempts to raise taxes to address a fiscal deficit?
It's happened many times throughout the centuries and throughout the world, according to Lewis himself! He also says that the idea of raising taxes is popular in academia (as of 2007, when the book was published) and among the economics consultants that these programs produce.
If the relationship between low taxes and economic growth is so clear, why would any self-respecting economist argue any differently?
The author doth protest too much, methinks.
I think the answer is that Lewis has a particular bias in how he sees the world (don't we all!), and that bias comes through in this point. He spends several chapters providing--and analyzing--case study after case study to hammer home that raising taxes in response to a deficit is automatically disastrous.
Like many points in economics, I think this relationship is not at all as clear and obvious as Lewis would like to believe. However, his arguments do make sense, and I'd bet that he is probably at least partially right.
***
This book is clearly directed at policymakers and economists.
So did I learn anything from reading Gold: The Once and Future Money? Yes, I did.
Do I recommend it? Mmm...that depends.
If you're looking for a quick, light read—definitely not! If you want a book that explains things simply and directly, no. If you're looking for sales pitch for why you should add gold to your investment portfolio, nope.
But if you're interested in macroeconomics, sure! If you like dense, academic-style works, yes, you should read this book. And if your B.S. radar is finely-tuned—sure, go ahead and read it.
I say this, not because I think Lewis is intentionally deceiving his readers, but because his explanations of a complex topic are just a little too simple. If you are a person who's easily convinced, you could read this book and come away thinking, "Gee, even a smart high-schooler could read this book and then successfully manage a nation's currency!"
That's surely the effect Lewis is trying to create.
But I'm old enough, well-educated enough, and suspicious enough that I'm reluctant to take such arguments at face value.
While I don't disagree with Lewis in principle and I think he has some very good observations, my read is that he's bound by his ideological biases. And for that reason, I do not recommend this book for most readers.
P.S. Nathan Lewis has a website, https://newworldeconomics.com/, on which he continues to make the same case. So you can get the flavor of his ideas before you decide whether or not to read the book.
You can support this blog—at no cost to you—by buying this book on Amazon.
Or, check out my other book reviews in this series:
1. Debt: The First 5000 Years by David Graeber
2. Rich Dad Poor Dad by Robert Kiyosaki
7. Gold: The Once and Future Money by Nathan Lewis
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