Mises Institute President Llewellyn H. Rockwell Jr.—while summarizing the views of Murray Rothbard on gold—said this,

In a gold standard, the “price of gold” is not unaccountably fixed by government intervention. Rather, the “dollar,” for the past half-century a mere paper ticket issued by the government, will become defined once again as a unit of weight of gold.

Twentieth and twenty-first century monetary history shows us how our government, step-by-step, removed the monetary gold standard and introduced their fiat paper currency dollar to fund their increasing political power. The cost paid by the American public of this fiat paper dollar is enormous. Our economy is plagued by endless boom-bust cycles, persistent inflation (dollar losing its purchasing power), unemployment, big interventionist government, and deteriorating social conditions. How much better our lives would have been in the last half a century if our country was still on a gold standard. One way to find that out is to find out what prices of various consumer goods would have been today if gold was money. I am going to do that exercise here.

As Austrian economists, like Ludwig von Mises, Murray Rothbard, or Joseph Salerno have said, the real sign of economic progress is secularly declining prices of various consumer and producer goods. Murray Rothbard said:

…improved standards of living come to the public from the fruits of capital investment. Increased productivity tends to lower prices (and costs) and thereby distribute the fruits of free enterprise to all the public, raising the standard of living of all consumers. Forcible propping up of the price level prevents this spread of higher living standards.

And Joseph Salerno said:

…historically, the natural tendency in the industrial market economy under a commodity money such as gold has been for general prices to persistently decline as ongoing capital accumulation and advances in industrial techniques led to a continual expansion in the supplies of goods. Thus, throughout the nineteenth century and up until the First World War, a mild deflationary trend prevailed in the industrialized nations as rapid growth in the supplies of goods outpaced the gradual growth in the money supply that occurred under the classical gold standard. For example, in the US from 1880 to 1896, the wholesale price level fell by about 30 percent, or by 1.75 percent per year, while real income rose by about 85 percent, or around 5 percent per year.

Such declining prices will raise our real wages (income) without us having to work more hours or putting in more efforts like what we have to do today in our fiat paper dollar system. Even with steady nominal wages and income, our standard of living will improve if prices of consumer goods fall with time. For example, suppose our income remains the same $100,000 annually during the time period of 2020 to 2025, but the price of housing falls every year. Let’s say the price of a house in 2020 is $100,000. At that price, we can only buy one house, and nothing else. But if the price of housing falls to $85,000 in 2021, we can buy a house plus many other items using that remaining $25,000. If the price of a house falls to $50,000 in 2023, $40,000 in 2024, and $25,000, then we can not only buy our house and other consumer needs, we can also save and invest, giving a boost to future progress.

Let’s now find out what prices of various consumer goods would have been today if gold was money. I chose NYC prices during the time period 1970 to 2025 as my sample. I chose the following consumer goods from NYC. I have converted to gold ounces using the AI machine Perplexity: home, rented apartment, electricity, Big Mac, ribeye steak, 1 gallon of gas, Ford 150 truck, 1 dozen eggs, Levi’s 501 jeans, airfare from NYC to LA, fine dinner in NYC, car tire puncture repair, 1 bottle of Coca-Cola, Lays chips, and a bottle of water. The following table reports the results:

Table 1: Price Conversion Table (1970 vs. 2025, Gold at $35 and $3,360/oz). All prices are in gold ounces (Source: Perplexity). 

As we can see from the data, over the past five decades prices of all goods in gold ounces have generally fallen since the 1970s. I chose 1970 because in 1971 President Nixon closed the gold window, and gold prices started floating freely in the open market reflecting the decline in the US dollar’s purchasing power.

While doing this analysis, I assumed many other factors like taxes, tariffs, etc., remained constant. If I assume that the big welfare-warfare interventionist government rolled itself back during this time period, then one can easily see these prices would have fallen even further. Our standard of living would have been much higher if we were on a gold standard with a constitutionally limited government in DC. Lower prices would have allowed Americans to save and invest more, which would have allowed even higher capital (physical and human) accumulation and economic progress. We all have paid an enormous price due to the present-day, big federal, state, and local government. This government has become so large that we can only wait for it to fall under its own weight now. When it is falling, we can get busy building better alternatives so when it is gone we can avoid chaos.