Eric Rauchway cites Freud’s explanation of the appeal of gold to conservatives

Historians in the News
tags: election 2016, GOP, gold standard

For how long has the gold standard been a cause of the political right and the libertarian right?

Pretty much since Franklin Roosevelt got rid of it in 1933. That’s the first thing he did since coming into office. The United States had suffered from severe deflation, had 25 percent unemployment… What Roosevelt wanted to do was reverse expectations about the direction of prices: If you think that prices are going to go down, your money is going to be worth more, so you hold onto your money instead of buying stuff. That slows down economic activity.

It was a pro-spending, pro-consumption, pump-priming measure.

When it became clear he meant it as a permanent policy, a lot of people started to get nervous about it – first, bankers and then the right more generally.

[Opponents] began to realize that the gold standard was a way you could rally a lot of disparate anti-Roosevelt factions. Because of the symbolic value of it.

It does seem to have a symbolic or psychological meaning even to people who don’t fully understand it. What’s the irrational appeal of the gold standard?

If you think about how Republicans talk about it: The enthusiasm is for a “hard” currency, a “strong” currency – a currency “tied” to gold. There’s a definite strength and discipline rhetoric around this. It’s the result of trying to make the complex charts and graphs of monetary policy into something you can understand.

This is where Freud would come in. This reluctance to part with something that is precious to you, this insistence on discipline. He identified a personality that was what he called parsimonious to the point of avarice, and you and I have probably heard the term “anal retentive” … He went into the folklore of Europe and the relationship between gold and feces, which is apparently quite strong. He identified that personality type as being typical of enthusiasm for the gold standard. ...

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