The Missing Golden Key to Development
While some still cling to the idea that economic and governmental development of Third World countries will come from external forces, it is becoming a much more widely accepted truth that the most robust long-term growth only comes when it is spurred by the countries themselves. Even when resources come from other countries, a great amount of input is required from the developing nation to ensure that they are used properly. Any Third World country that wants to improve will not improve if they are given resources and institutions from above with no understanding of how their culture works. The best solutions for any of these issues are emergent from that country’s culture, because they are fully informed of the surrounding knowledge that cannot be put into formal development economics theories. Gold is a tool that empowers developing nations to make progress on their own terms rather than wait for a misinformed helping hand from above. Gold also provides stability to these country’s citizens as they navigate a world of uncertainty and crises. Gold protects developing nations from two of the classic banes developmental growth: monetary instability and crises.
Austrian economist William Easterly conceptualizes the interventionist view of development as a continuation of the colonialist ideology that spoke of “the White Man’s Burden.” Billions of dollars flowing into Africa, South America, and the Middle East with extremely subpar or short-lasting outcomes made easterly doubt the traditional aid framework, which is the idea that more money equals more development. The problem with pumping money into Third World countries is that without associated societal and governmental change, the money will be quickly dissipated, or make its way into the hands of bad actors. While many developmental thinkers would say that the solution is to install government in society from above, the hard truth remains that only people within a culture can understand it well enough to create the most effective government for that particular culture. While strong property rights and a low regulatory burden seem to be universal creators of growth, beyond that there is a wide spectrum of practices that work best for unique cultures. The individualized and self-driven nature of real economic progress means that sometimes the choice must be taken to wait rather than try to push forward growth in an arbitrary direction.
Gold should play a key role in this sort of self-driven societal progression. In attempting to copy irresponsible first world countries like America or the EU, many developing nations have fiat currencies of their own. In many cases, this leads to high monetary instability and inflation. Gold, possessed by a country’s central bank, serves as a building block for monetary stability and the resulting economic growth. In the case of developing nations, reserved gold also has the benefit of displaying that the leaders are capable of impulse control. Rather than use all the resources they have as soon as they get them, they are making the choice to restrain themselves for the sake of their currencies’ strength. This might not be the most groundbreaking modern monetary theory, but it is much more what these countries need than an excess of hype-driven inflation.
Because these countries are made up of millions of individuals with thousands of small businesses, the endurance of these individuals’ wealth is directly tied to the success of the country. Often people are forced to evacuate because of wars or natural disasters, and gold could let their progress stay safe with them, even when they cross borders. A country making gold a key part of their economy would allow people in the most rural areas or with existential threats to endure and come back to rebuild their country once it had survived any individual threat. Developing countries face the problem of the wealthiest people in their society saving up and then leaving as quickly as possible. This cycle could be eased if wealthy individuals kept gold rather than their countries currency, because they wouldn’t have to worry about leaving the sinking ship of inflation. Gold, utilized effectively, could noticeably better the lives of billions in these countries and unlock unheard of growth and stability.
