June 4, 2015 by ethelfritha
A few years ago, an old friend of my father’s died. Lynn was the sort of eccentric old bachelor who would not have been out of place in a turn-of-the-century childrens’ novel. He invented goofy toys and distributed them to the kids in his neighborhood. In his youth, he had played the piano for silent movies. He and my dad had met at Cessna, where they were both engineers. Lynn introduced my parents to each other, and when I was born he was the one who stayed with my older brother. He spent holidays with us and never forgot our birthdays. One Christmas he got me a fish named Elmer. For my eighth birthday, he gave me stock. Like, in a company. Once he gave me $500 stuffed in a brown paper bag. Honorary eccentric bachelor uncles FTW.
Lynn didn’t have any relatives in the area, so my dad was the executor of his estate. And what an estate it was. Like many people who came of age in the depression, Lynn didn’t put a lot of faith in banks. Instead, he had squirreled away piles of cash in strategic places around his house. And by “cash” I don’t just mean stacks of hundred dollar bills. One night my dad called me down to the basement, where he was going through some of Lynn’s stuff. He handed me a cloth drawstring bag, let me hold it for a minute, and then took it back. “What was that?” I asked. “Oh,” he said, “I just wanted you to see what it was like to hold a bag full of gold.”
Fun fact: gold is one of only three elements that isn’t gray or black. (The others are copper and cesium, if you’re curious.) It is malleable, light, and relatively rare. It can be made into beautiful things. Whatever its integral qualities, the fact remains that gold has been the standard of riches for countless societies and has been absolutely formative to the development of the Western world. Egyptians used it to inspire reverence and awe for their gods and pharaohs. The Hebrews–coming out of Egypt–had so much gold with them that they were able to build a large golden idol. And then came ol’ Croesus.
Croesus, with his access to the gold deposits of the river Pactolus, has the honor of being the first person in history to establish and official gold and silver currency, complete with stamped coins. From here, Bernstein traces the long and complex history of gold in the Western world, from the coins of Croesus to the Roman-run gold mines in Nubia and elsewhere; from the massive Byzantine bezants to the Arabs’ monopoly on the Gold Coast and the caravans of the Sahara; from the plundering of the Incan empire and Spain’s subsequent economic tailspin to the intricacies of the Bank of England’s gold reserves; from the gold bonanzas in the Western US and the eventual deviation from the gold standard throughout Europe in the US, all the way through the social conditions that led Lynn Martin to hoard gold pieces in the walls of his house.
This book is extremely engaging right up until the moment that it’s not. The problem is that at the beginning of the eighteenth century, currency got a LOT more complicated, and it’s all Isaac Newton’s fault. As the head of the British mint, Newton wrote a brilliant and influential treatise on the subject that, as Bernstein says, “inaugurated a tradition that will haunt future chapters of this history: economic forecasts by policymakers that turn out to be wrong.” From this moment on, the ins and outs of Europe’s economies became more and more tangled and difficult to follow.
Sir Isaac Newton: still making me feel stupid seven full years after demonstrating the proof of Kepler’s second law for Mr. Berquist’s physics lab.