By Noah Dawson
When I cast my ballot in the Republican Primary, I voted against Proposition 7.
For those unfamiliar, the proposition asks voters if they support the following: “ The Texas Legislature should establish authority within the Texas State Comptroller’s office to administer access to gold and silver through the Texas Bullion Depository for use as legal tender.”
This sounds good at first glance. After all, many supporters of small government such as myself support sound money. However, one key problem exists within the proposition: its implicit endorsement of the failed economic policy of bimetallism.
Essentially, bimetallism is the use of two precious metals as currency or to back currency. This policy has historically used both gold and silver. However, economic history has been unkind to such policies, because any such policy must use a government-sanctioned exchange rate between the two metals. However, like all central planning, such a policy is doomed to failure. Even governments which try to follow the market rate are doomed because it can only follow.
In fact, the concept of bimetallism has been so roundly rejected that it earned the scorn of both economists across the ideological spectrum. It didn’t just earn criticism the prominent free-market thinker Ludwig von Mises in his treatise Human Action; Karl Marx himself expressed opposition in Das Kapital.
While the proposition itself does not carry legal weight, the idea of bimetallism as a policy has rightfully been left in the past. We should not open the door to letting it back. It is not a policy for sound money, it is precisely the opposite.
