The True Gold Standard (Second Edition)
It is an extraordinary privilege to present this exclusive interview with Lewis E. Lehrman, in 21 installments, of which this is the nineteenth.
Lewis E. Lehrman has written widely about economic and monetary policy. He has co-authored the book Money and the Coming World Order (1976) with renowned MIT Economist Charles Kindleberger and others. Lehrman has written about economics in publications such as Harper's, The Washington Post, The New York Times, The Wall Street Journal, Weekly Standard, Crisis, Policy Review and National Review. His writings about monetary economics earned him an appointment by President Ronald Reagan to the Presidential Gold Commission in 1981. Along with Congressman Ron Paul, Lewis Lehrman collaborated on a minority report of the commission, which was published as The Case for Gold (1982).
Lehrman published seven volumes on “Rueff Monetary Economics” (The Collected Works of Jacques Rueff, 1997, Plon, in French). Jacques Rueff, the distinguished French monetary economist, established the monetary and economic plan of the Fifth French Republic, as President DeGaulle's chief financial advisor. The primary purpose of the plan was to restore economic prosperity, a stable French currency, and the end of French inflation by means of convertibility to gold of the French franc. Lehrman has been named to the advisory board of the American Principles Project’s Gold Standard 2012 initiative.
Lewis E. Lehrman [Photo by Ralph Benko]
You have constructed your model for the restoration of the gold standard to rule out the possibility of the prejudicing of workers' interests. Your design provides certain elements to, if anything, mildly advantage debtors over creditors and labor over capital.
Would you explain how the market price discovery period works and the additional checkpoint to provide additional assurance that workers will not be prejudiced?
In my proposal to go forward to a modernized version of the classical gold standard, the market discovery period of the convertibility price of currencies to gold would last not fewer than 90 days, perhaps not more than one year. At the end of the period, the convertibility price would be established based on the market price of gold at that time, plus a determination of that convertibility price which would give rise to a stable, or slightly rising price level in the short term, so as to exclude deflation immediately after restoration; and at the same time, create the basis for an extended period of growth and prosperity, especially for indebted working people on wages and salaries.