Saifedean Ammous, the renowned author of The Bitcoin Standard, has released an alternate history titled The Gold Standard. The book explores a reality where a decentralized gold-based system uproots central banking, potentially preventing the catastrophic upheavals of the 20th century.
The Fiat Problem
Ammous argues that fiat currency is the central issue plaguing modern society. "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," Ammous stated in an interview. He posits that removing fiat systems would lead to significantly less violence and greater global prosperity.
A Different 1915
In our timeline, World War I resulted in over 40 million deaths, the collapse of major empires, and the rise of radical political movements like communism and fascism. Ammous’s book reimagines 1915—shortly after the outbreak of the Great War—by introducing a decentralized, immutable system of value transfer based on gold.
Key Themes:
- The Failure of Central Banking: Ammous argues that the traditional gold standard failed due to the "incessant extension of bank credit without corresponding savings."
- Monetary Policy and War: The book suggests that imperial ambitions, poor political decision-making, and irresponsible monetary policies allowed Europe to "sleepwalk" into the First World War.
- The Power of Decentralization: By introducing a decentralized gold system, Ammous explores how the course of human history could have been altered to favor peace and productivity over destruction.
Conclusion
The Gold Standard serves as a thought experiment on the intersection of monetary policy and global stability. By examining the Belle Epoque and the subsequent collapse of the European order, Ammous highlights the profound impact that sound, decentralized money could have had on the trajectory of the 20th century.