Munich Personal RePEc Archive

The Commodity Standard

de Largentaye, Jean (1967): The Commodity Standard.

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Abstract

The nature of money (the gold standard or a fiat money during the twentieth century) is the fundamental cause of poor economic performance (inflation, unemployment, slow growth). Banks which issue fiat money and thus exercise money sovereignty, control the economy and are hence responsible for these unsatisfactory results. Thanks to the dollar, the United States and American banks have acquired a dominant position in the world. A commodity standard would ensure price stability and full employment through the stabilizing effect on aggregate demand of adjustments in the volume of stocks of monetary commodities. It would also ensure fairness in credits, both long-term and short -term, and the fairness of trade with other countries. Storage costs inherent to the commodity standard would be negligible compared to overall gains for the economy.

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