Charleston Voice: Greenbackers Smear Ron Paul

“Running the ‘Machine’”: An 1864 cartoon of President Lincoln and his Cabinet watching
then-Secretary of the Treasury William Fessenden operating “Chase’s Patent Greenback Mill.”

by Thomas E. Woods, Jr.

Recently by Thomas E. Woods, Jr.: Media Tell People: Government Your Friend, Ron Paul Your Enemy

“Why do Paul, Beck, and the World Bank have the same monetary reform policy?” wonders Red Pill Radio. (I have no idea what Glenn Beck’s proposal for monetary reform is, so I’ll stick to Ron Paul and the World Bank.) This is like asking, “Why did the Germans and the Russians cooperate so well during the Battle of Stalingrad?”

The article says “Robert Zoellick [of the World Bank] favors gold money just like Ron Paul.” This is laughable. Just because someone utters the word “gold” does not mean he favors the classical gold standard, or indeed any kind of gold standard. What Zoellick said was, “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

This is an opaque statement, to say the least. At most, it could be referring to an extremely attenuated, sort-of, ultra-minimal “gold standard,” analogous perhaps to Bretton Woods (in which gold did not circulate among the general public at all, but could be acquired by foreign central banks in exchange for U.S. dollars), but not an actual gold coin standard, which the world’s central banks have precisely zero reason to support (it being a merciless restraint on their ability to inflate).

Zoellick himself clarified his remarks to make clear he did not support any kind of gold standard whatever, so there isn’t a long list of excuses for pretending he supports – of all things! – Ron Paul’s monetary policy. Zoellick explains, “Gold is now being used, being viewed, as an alternative monetary asset. This is not the same as a gold standard [emphasis added]. Gold has become a reference point because holders of money see weak or uncertain growth prospects in all currencies other than the renminbi, and the renminbi is not free for exchange. So in relative terms, gold is appealing to people who ask ‘where should I put my money.’”

It’s really important to understand what terms mean when discussing monetary theory and policy, and particularly when you’re on the verge of drawing a ludicrous comparison between a supporter of a free-market money on the one hand and a supporter of a centrally managed money on the other. Just because someone says “gold” doesn’t mean he supports the classical gold standard, which is what Ron Paul has supported in the past in some of his writings.

Greenbackers (who support a fiat money issued directly by politicians via the U.S. Treasury rather than via the Federal Reserve) have been unwilling to draw these distinctions.

There are numerous phony “gold standards” out there, I might add. The gold price rule is one. Here the gold price is used as a signal for central banks as they formulate monetary policy. A falling gold price, say advocates of such a system, means monetary policy is too tight; a rising gold price means it’s too loose. It should be obvious that this system, in which once again gold does not actually circulate as money among the public, has nothing in common with the classical gold standard. But I’m fairly confident the Greenbackers, hearing the word “gold,” would say it, too, is “just like” Ron Paul.

The irony of all this is that Ron Paul is not even calling for a gold standard, though he has advocated one in the past. What he is actually calling for is a free market in money, in which we do not need to trust governments to stay faithful to some “standard.” Ron Paul favors the Misesian/Hayekian solution of permitting the market to determine what the people wish to use as media of exchange. Unlike the Greenbackers, he would not empower the police to enforce a monopoly system by which everyone would be obligated to transact only in green pieces of paper issued by Harry Reid and John McCain.

At the end of the blog post we read: “The Rothschilds’ gold solution is NOT real monetary reform.” Again with the whole “the banking interests around the world are clamoring for a gold standard” routine! If it were true that the most influential bankers wanted a gold standard, wouldn’t we already have one? Aren’t the Greenbackers always insisting (often with good reason, to be sure) that the banking establishment is extremely influential? Then why has it failed so miserably to establish the gold standard it supposedly wants?

The blog post also contains a reference to Ellen Brown, whose Web of Debt is a central text in the Greenbacker canon. Unfortunately for them, Gary North has exploded it completely.

Strewn with historical and theoretical errors, including fake quotations no serious researcher would have used, the book has been utterly destroyed. See for yourself.

I have never seen so thorough a demolition of anything. Brown’s attempts to defend herself only make things worse, as North’s responses to her responses make abundantly clear.

I may as well quote one. Here is North responding to Brown’s response to his first historical criticism of her book:

Here is her first point in response to my criticism of a bogus quote from Sir Josiah Stamp. Here is my article.

Here is her response.

1. A bogus quote from Sir Josiah Stamp on the Bank of England
Here is what I wrote, giving an endnote for reference: “He is quoted as saying in a talk at the University of Texas in 1927: [etc.]” (p 2) He IS quoted as saying that, by many people. Google gives 68,000 results.

This is simply incredible. I proved that there is no evidence for the existence of her supposed speech by Stamp. I pointed to the Wikipedia entry on Stamp. Here, we learn this: “Said to be from an informal talk at the University of Texas in the 1920s, but as yet unverified.” But this does not matter to Ellen Brown. What matters to her is that she quoted someone who had not verified it – a 1995 article in an obscure magazine. What matters is that 68,000 Google hits posted by an innumerable army of crackpot Greenbackers quoted it.

This is not scholarship. This is putting the shuck on the rubes. Her readers are the rubes.

This woman is the Greenbackers’ #1 scholar. The movement is intellectually defenseless.

To sum up: there is a difference of opinion between Greenbackers and people who believe in free-market money. To the extent that the two sides intend to engage each other, they should do so in a spirit of honesty and charity. It is inane to pretend Ron Paul and the World Bank agree on monetary policy. I mean, really.

Reprinted with permission from TomWoods.com.

December 16, 2011