Gold remains, in Keynes’ (CW VI, p. 259) phrase, an important “part of the apparatus of conservatism,” and in more senses than one. Attend a conference of goldbugs and you are likely to be surrounded by the most fervent denizens of the far right, who love not only the austerity that gold symbolizes, but also the fact that it’s a non-state form of money. In a tremendous reversal of 19th century populist ideology, which was feverishly anti-gold, many of today’s right populists are very pro-gold, as the only antidote to the parasitical rule of Washington and Wall Street. A cultural bonus to right-wing goldbugs was the large presence of South Africa in the industry and of South Africans at their conferences; many, though certainly not all, aurophiles were admirers of apartheid. Ironically, many leftish South Africans now root for monetary disorder in the North, which would result in heavy demand for gold, allowing the country to play the role of a “prosperous undertaker at a funeral.” Though South African mines are getting pretty tapped out, the six largest South African firms controlled over a quarter of world gold production in 1993, with the huge Anglo-American combine alone responsible for over 18%. Canada, with 8%, and the U.S., with 7%, were a distant second and third (Tegen 1994).
Gold’s actual performance is a source of constant frustration to goldbugs. The metal’s main charm is that it retains its purchasing power over time; should inflation soar or the banking system implode, gold will not vanish like a paper claim. But its drawbacks are plentiful, and good reasons why all societies have gravitated to state-sponsored money. Gold pays no interest, is bulky, requires assay, and must be stored. It is heavy and physical in a world that tends towards ever more immateriality. Something that normally does no better than shadow the general price level is no fun, though goldbugs are always imagining some disaster — hyperinflation, the collapse of the state, climatic catastrophe — that will bring their beloved metal back to life.