Review of
The Real Danger in Our Gold
by Harry Scherman
Sidney J. Abelson
[Review of the book The Real Danger in Our Gold,
by Harry Scherman, published in 1940 by Simon and Schuester. Reprinted
from The Freeman, November, 1940]
The next-to-impossible is achieved in these pages -- a brief,
readable and, for every layman's purposes, practicable explanation of
the role gold plays in modern economic society. Whoever does not read
this book deprives himself of one of the outstanding opportunities
contemporary publishing has offered in the way of simplifying vital
knowledge.
Totalitarian doctrinaires, of both the Right and the Left, have
struggled heroically to gild gold with the stigmatic hues of an evil
power exercised by "finance capitalists," but Mr. Scherman
neatly debunks their impressionistic artistry. He reveals the purely
functional and wholly practical services which gold renders in
facilitating international exchanges and assisting domestic monetary
stability. He proceeds further to expose -- and I use the word
advisedly -- the tremendous possibilities for political misuse which
are inherent in America's huge governmental store of gold,
possibilities which exist precisely because such a store of gold, far
from being potentially valueless, actually grows increasingly more
powerful with its increasing accumulation.
By all means read Mr. Scherman's "The Real Danger in Our Gold."
But when you do so, bear in mind that an understanding of the gold
situation does not provide the clue to basic economic maladjustments.
Pay attention particularly to the author's conclusion on Page 81 that
"Government fiscal mismanagement for seven years has been one of
the principal factors that have kept our enormous bank deposits to so
large an extent unused in employing the population." (Mr.
Scherman's emphasis -- and mine!)
Mr. Scherman apparently believes that employment begins as a result
of proper fiscal management, that "bank deposits," which he
himself reveals in his text as consisting largely of debts and
promises, can put men to work. His concentration of the importance of
finance in the problem of employment is emphasized further on page 47
where he attributes "the rise of totalitarianism" to an "attempt
of governments to control the economic consequences of .their own
financial jugglery." But such analysis fails to trace to its
source the cause of financial jugglery; and further it tortures the
simple historic truth that Germany, Italy and Russia, the totalitarian
countries referred to, had no problems of financial management as such
at the time they were swooped down upon by political totalitarian
ideologies.
The rub of the employment problem everywhere is not what to work
with, but the availability of a place on which to work. To paraphrase
Jefferson's famous precept, "Give land and the people will make
their own capital."
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