Keith, the following is based on our last exchange. Ed
Ed: The great social change that took place in the western world during the 18th and 19th Centuries was due to tremendous technological and social change and not due to the gold standard. Keith: It certainly was! Without gold as the basic (most valuable) currency (and copper and silver as subsidiaries), the industrial revolution would never have got started. Large amounts of it had to be available for investment before innovations could get off the ground. This was available in London as a result of international trade with other countries (where gold was already the universal trading currency) and also a considerable flow of landowners' rents and profits (copper and silver mostly) that was fed into London via the countryside banks to exchange for gold (to pay for foreign luxury goods or skilled artists or industrial development somewhere else in the country, etc). The other great European seaports such as Amsterdam, Hamburg and Stockholm didn't have countryside banks behind them so this was the reason why the industrial revolution took off in England many decades before elsewhere in Europe. Ed: I'm not arguing that capital, and large amounts of financial capital, weren't needed to promote industrial and social change, but only that it needn't have been financial capital based on the gold standard. Much larger amounts of financial capital are needed to keep the world going and changing now and to the best of my knowledge none of this is backed by gold.
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