At the turn of the 20th century, governments turned their backs on Gold. It is no wonder the ‘working class’ became revolutionaries. Lacking an understanding of how they had been shafted, they turned to Marx. A classic case of ‘out of the frying pan and into the fire’. The below is extracted from Dawn of Gold.
19th Century Prosperity
There is no attempt here to try to make the case that the classical ‘Gold standard’ produced instant prosperity for all, or that it was perfect. Poverty remained widespread, but judgement must be made on a relative basis. Prior to this era, the situation was very much worse. Rural life, subsequently idealised out of all recognition, was freely abandoned as people chose the prospects of jobs and opportunity offered by the city life. There can also be little doubt that prosperity would have spread even further and faster under the real Gold standard.
“Mere quotations of figures will not make clear the increased share of the national wealth which now finds its way into the pockets of the working classes, because of the unprecedented cheapness of all the necessaries and many of the luxuries of life (intoxicants alone excepted) has raised the buying power of wages in a degree which cannot be estimated.” Sir Herbert Maxwell Bart MP 1897
Arthur Toynbee, the 19th century economic historian and social reformer, estimated that under the classical ‘Gold standard’ in the UK, by 1875 the working classes had amassed savings of £130,000,000. In light of the situation that existed just 100 years before, when most of these people had never seen a pound let alone owned one, this is an astonishing figure … but only for those who do not comprehend the blessings of the accumulation and circulation of real money.
“… in those thirty years (1851-1881) the wage-earning class had increased in number from 26,000,000 to 30,000,000 or 16 per cent; while the wages paid to them had increased by nearly 100 per cent. In fact the income of the working classes in 1881 was about equal to that of the whole nation in 1851, with largely increased purchasing power, owing to reduction in prices. W.H. Mallock, in an extensive analysis of British wages.
Not only were wages going up** whilst prices were falling, the hours worked to produce those increased wages were also falling. The concept of leisure time for working people first became a reality in the 19th century, as did the existence of a middleclass.
The accumulation and circulation of Gold began the process of removing the permanent wealth gap between the few born to luxury and the many born to abject poverty. The withdrawal of circulating Gold that was begun in 1914 ensured that not only was this process abruptly terminated, but that it was reversed.
From 1815 to 1914 the population of the UK increased almost 350% — from 10.25 million to over 46 million. This surge in population, at the same time as the general standard of living was rising, was unprecedented in history. By way of contrast, when Gold was withdrawn from the equation in 1914, the population growth dramatically slowed. In 2014, one hundred years later, the population is 64 million; an increase of only 36% and with a falling standard of living.
Money has been the most misunderstood of subjects. Even sex, with all its troubles, seems like a calm body of transparent water by comparison. For hundreds of thousands, maybe millions, of years there was zero human progress. Human progress was not automatic; it needed a catalyst; that catalyst was Gold. It still is. To survive, societies need Gold and silver just as surely as the human body needs air and water.
** Real wages doubled between1860 and 1890—Brook and Watkins