In 2003, Dr. Gary North e-published a brief article entitled, "The Myth of the Gold Standard." While Mr. North displays a good deal of historical acumen, the present author maintains that his article misses the theological target at two crucial points, leading to a kind of economic pessimism one would hardly expect from a man notorious for an aggressively "postmillenial" eschatology.

Dr. North argues that there are two problems with the traditional view of "goldbugs." The first is that gold-standard advocates somewhat naively affirm the right of civil governments to coin and manage their own money supply, given their bureaucratic track record as arch-counterfeiters. By this he means that governments act like con-men, first gaining the trust of citizens by printing gold-backed money, only to resort later to the fiat printing of ever-inflating dollars (or rupees, etc.) down the road. And so they have.

He puts it thus: "All of the defenders of the gold standard believe I am not making this up that the best way to reduce the practice of counterfeiting is to hand over a legal monopoly over money creation to the most accomplished and universally recognized counterfeiters in history: civil governments." This implies that Mr. North favors the privitization of coinage, given his opposition to the nationalization of money.

Second, North holds that expecting a state to adopt and keep some form of a gold standard foolishly requires the state to limit its own spending (which is to say, its own power), when history -- anyone's history -- seems pretty clear that this is the one thing civil governments never do. Hence the title of the article: The Myth of the Gold Standard.

But given Mr. North's own self-stated "goldbug status," however, it would seem his article should have been better entitled, "The Myth of Honest Governments." For like the author of Hebrews, who found fault not with the divinely-given standard of ethics, but with the inability of the people to keep it, North essentially distrusts governments, not payments made in specie.

By way of dissent, then, let us consider the following: the Bible itself does not precisely teach a gold standard, but a bi-metal standard of gold and silver, with coinage value measured by weight and purity. The only time this bi-metal standard seems to have been interrrupted was a respite brought about with Solomon's over-procurement of so much gold (like the inflation generated by Spanish conquistadores in 15th/ 16th century Spain), that silver was "as common as stones." This shows that silver had lost its value in Israel because of the influx of Gold brought to Solomon from Ophir (a place corresponding today roughly to southern Saudi Arabia).

Second, the Lord Jesus openly affirmed the right of the (Roman) goverment to mint and control its own coinage. When asked whether it was lawful to pay the tax to Caesar, the Lord produced a coin, asking "Whose inscription, and whose image is upon it?" They answered, "Caesar's." Jesus then drove home the point, "Give to Caesar, therefore, what belongs to Caesar, and to God what is God's."

The theonomic principle Jesus thereby highlighted is this: Whatever bears the image of a king rightly belongs to a king. Since the coin bore the image of Caesar, it rightly belonged to Caesar. This means it was lawful to pay the tax -- which is just what Jesus went on to do. But this leaves open the implied question Jesus raised by His analogy: what it is that bears the image of God, that we must give to God? The implication is clear enough -- Each owes to God the whole of his being and wealth. For man bears the Imago Dei.

North's historically-grounded complaint is that is hardly makes sense to grant a monopoly of power to coin money to people who will never give to God what is God's, and always end up debasing the money they coin -- ripping people off. We concede his point (historically) about the nature of government in the past, but not the conclusion he infers from it. Notice, that was NOT the conclcusion that Jesus drew. Quite the opposite. And here is why.

Dr. North seems unaware that he has turned good history on his part into bad theology. He has assumed that because governments have behaved badly in the past, that they will necessarily CONTINUE to do so in the future,and that uniformly. From a biblical standpoint, this represents an unwarranted induction. He has assumed that the future is not an era of greater grace than the past, but that the past always forms prologue. This assumes that Christians will never gain hold of the reigns of civil power, or that if they do, they will not govern based on biblical principles. Here, he seems to imply that applying the perfect law of the Lord (as Christians must) to govern a society -- and that the Holy Spirit who indwells them -- would make little or no difference in the way they would rule, at least with respect to their economic practices.

In short, to refute the idea of the practicability of the gold standard (or, bi-metal standard, as the case may be), he has had to resort to a kind of Amillenial view of history, a future characterized by "ethical stagflation" at the level of national leadership.

But this is clearly not the eschatology of the Bible, which proclaims decisively the salvation of men from every tribe tongue and nation, and that whole nations will convert to the Lord in the latter times (see Psalm 21). And when God establishes righteousness in the seats of power, national conversion will doubtless come with a transformation of economic policy as well.

Men with honest hearts will tend to monetize gold and silver, which leads to honest money, and national prosperity. The evil triplets of fractional reserve banking, unlimited credit production, and the printing of fiat money, will fade from the national and international scene as Christian nations will either voluntarily renounce them. Moreover, pagan nations will inevitably ruin their own nations for failing to follow biblical economic practices, since bogus economic policies eventually collapse nations, giving rise to replacements whose leaders will learn from history, if not from Scripture alone. For "Righteousness exalts a nation, but sin disgraces any people" (Pr. 14:34). Righteousness has the final Word.

CONCLUSION: Though this article takes aim at one aspect of Dr. Norths economic theology, by way of a brief postscript, I hasten to add that I highly recommend Dr. North's books, which may be downloaded freely from http://www.freebooks.com From this authors point of view, he is rarely incorrect, always insightful, and never fails to entertain. And his books are free.