The Instigator
clarkmcc
Pro (for)
Losing
2 Points
The Contender
EndarkenedRationalist
Con (against)
Winning
18 Points

Should Printed Money be Backed by Gold?

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Post Voting Period
The voting period for this debate has ended.
after 4 votes the winner is...
EndarkenedRationalist
Voting Style: Open Point System: 7 Point
Started: 11/5/2013 Category: Politics
Updated: 3 years ago Status: Post Voting Period
Viewed: 1,252 times Debate No: 40027
Debate Rounds (3)
Comments (8)
Votes (4)

 

clarkmcc

Pro

Having our money backed by gold gives our cash a guarantee that it will not suddenly turn to paper.

In 1934, an amendment was passed that did not require paper money to be backed up by gold and silver (http://www.federalreserve.gov...), this means that our paper money was just paper and nothing else. Before then you could literally walk in and exchange your cash for gold or silver.
EndarkenedRationalist

Con

To begin, I would like to thank my opponent for introducing such a great topic. As Con, I will argue against the idea of backing printed money with gold. I look forward to a grand and courteous debate!

To clarify, what my opponent is referring to is an idea called the Gold Standard as defined by the Merriam-Webster Dictionary.

My opponent has failed to present any arguments, nor has he specified that Round 1 be purely acceptance. However the restrictions of characters prevent me from setting forward any solid arguments, so I must assume that Round 1 is only for acceptance. Therefore, I will pass it to my opponent. I anticipate his or her arguments.

Source 1: http://www.merriam-webster.com...
Debate Round No. 1
clarkmcc

Pro

I too, look forward to this debate!

Consider this: I want you to give me your car, and in exchange I will give you a stack of playing cards, there's a lot of them, and they have cool designs on them, why not? Because you don't think they have any value. The only reason You and I complete transactions today is because we trust that the other person will give us something in exchange.

As soon as we believe that something has no value, we don't use it. The Gold Standard presents a system of protection for pieces of paper. My question to you is, why would I want to give you something that does have value, like my car, for something that does not, like paper? The Gold Standard provides a safe setup so you know you money has value.
EndarkenedRationalist

Con

My opponent claims that we complete transactions because we trust the other person to "give us something [of value] in exchange. Money has value because we place value on it. Without that, it is just paper. However, gold also only has value because we place value on it. Without our perception, gold is also worthless.

Economic experts in Chicago took a poll and 100% of economists disagreed with the Gold Standard. My opponent noted the amendment, but as the Atlantic notes, the moment the US left the Gold Standard, the economy improved. The Gold Standard prevents banks from printing money when it's needed, which can drastically damage economies. The Gold Standard is dangerous.

I have no room for my sources, so I'll add them to the comments.
Debate Round No. 2
clarkmcc

Pro

If you look at it that way, nothing really has value. Gold obviously has value because we place value upon it.

Over the course of history, kings, rulers, citizens, and people have turned to gold for exchanging "stuff".

Gold's unique properties of malleability, electrical, and thermal conductivity, its a rare metal and as such, we can see the principle of supply and demand at work here. There's not a lot of it (relatively) so its value (the value us as the people place upon it) rises. Because gold has been placed at high value in history, and has always been a resort for money, people place their trust in gold.

Back up our "fake" money, and it becomes "real" money. That protects our "fake" money from turning into invaluable paper.
EndarkenedRationalist

Con

First note that my opponent concedes that gold also has only the value we place upon it. From an economical standpoint, this equalizes gold and money.

According to the Chairman of Roubini Global Economics, a "fixed exchange regime" would fail because "it "exacerbates the business cycle." With a gold standard, banks are unable to fight inflation or deflation. This causes havoc among economies.

Extend my second paragraph from before, as it was dropped.

Gold's properties make it rare but hardly something we should place a standard on. This is false equivocation.

Finally, "You shall not crucify mankind upon a cross of gold!" (Couldn't resist, sorry.)

I would like to thank my opponent for an excellent debate and urge you to vote Con!
Debate Round No. 3
8 comments have been posted on this debate. Showing 1 through 8 records.
Posted by wrichcirw 3 years ago
wrichcirw
1) CON: "Money has value because we place value on it. Without that, it is just paper. However, gold also only has value because we place value on it. Without our perception, gold is also worthless."

Excellent point. Gold is indeed simply another form of fiat.

2) CON: "Extend my second paragraph from before, as it was dropped."

Agree.

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CONCLUSION

Short and sweet debate, however PRO never engaged with CON's arguments, whereas CON addressed and refuted PRO's assertions. Gold is just another form of fiat, and rarity/industrial usage are not enough to establish burden of proof that gold can back printed money.

My own opinion is that gold is a fungible store of value, something more easily exchanged to settle international debts than, say, land. Given its long history as money, the relatively high barriers against counterfeiting gold, and also the fact that it's a commodity without a primary industrial usage (making it more immune to supply/demand shocks from any one industry), if money did require some sort of physical backing, gold would be the best option out of a list of poor choices.

Arguments CON. I will give sources to CON offset by S&G/conduct to PRO because CON cited various sources without providing actual citations or links.
Posted by EndarkenedRationalist 3 years ago
EndarkenedRationalist
Thank you, iRespond. And you make an excellent point.
Posted by iRespond 3 years ago
iRespond
I would have voted for Con but my country (Philippines) is not in the list to be able to verify my account here.
Posted by iRespond 3 years ago
iRespond
Money is simply a means to exchange goods or services with value. It's purpose is to put measurement on the value of goods/services relative to each other and facilitate efficient trade. The money supply in circulation should therefore support the value of goods and services produced and needed by the economy. Having said that, if money should be required to be backed by gold, the supply of gold would not be enough to match the growing value (with the growing demand) of goods and services in an economy. Thus instead of protection, such "backed by gold" requirement would only be an unnecessary restraint to necessary changes in the economy. That's exactly the reason why the gold standard as the basis of monetary system is no longer used by any country around the world.
Posted by BEaPATRIOT 3 years ago
BEaPATRIOT
Gold is valuable because it is rare, people like rare things because we like to have things others do not have.
That is why we buy expensive things because other people cant afford it so we feel superior.
Posted by clarkmcc 3 years ago
clarkmcc
This has been a fantastic debate!
4 votes have been placed for this debate. Showing 1 through 4 records.
Vote Placed by Emily77 3 years ago
Emily77
clarkmccEndarkenedRationalistTied
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Total points awarded:05 
Reasons for voting decision: It would have been nice to see more space allotted for discussion about such an interesting topic, but CON definitely made the better arguments here.
Vote Placed by wrichcirw 3 years ago
wrichcirw
clarkmccEndarkenedRationalistTied
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Total points awarded:15 
Reasons for voting decision: see comments. Short and sweet debate. Upon noticing the sources in the comment section, and given the paucity of space in the debate proper, I will rescind my S&G score.
Vote Placed by drhead 3 years ago
drhead
clarkmccEndarkenedRationalistTied
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Total points awarded:05 
Reasons for voting decision: Con did present a rather strong argument - gold only has the value we place on it, similar to paper money. This demolished Pro's main argument. Con also used more sources (yes, they were placed in the comments, though that is a common practice here).
Vote Placed by Ragnar 3 years ago
Ragnar
clarkmccEndarkenedRationalistTied
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Total points awarded:13 
Reasons for voting decision: You can still use money to buy gold... Conduct: Bypassing the character limit via the comments... Argument: Con did a very good job (great quote by the way), his main argument that gold need not have any inherit value stuck with me, even more since sitting in a vault it's not doing anything useful. Pro did make an ok appeal to tradition with his talk of kings using it; however it kind of fell flat.