Thoughts on this quote:
In the economic sphere there are many widespread superstitions. Why do people value gold and precious stones? Not simply because of their rarity: there are a number of elements called “rare earths” which are much rarer than gold, but no one will give a penny for them except a few men of science. There is a theory, for which there is much to be said, that gold and gems were valued originally on account of their supposed magical properties. The mistakes of governments in modem times seem to show that this belief still exists among the sort of men who are called “practical.” At the end of the last war, it was agreed that Germany should pay vast sums to England and France, and they in turn should pay vast sums to the United States. Every one wanted to be paid in money rather than goods; the “practical” men failed to notice that there is not that amount of money in the world. They also failed to notice that money is no use unless it is used to buy goods. As they would not use it in this way, it did no good to anyone. There was supposed to be some mystic virtue about gold that made it worth while to dig it up in the Transvaal and put it underground again in bank vaults in America. In the end, of course, the debtor countries had no more money, and, since they were not allowed to pay in goods, they went bankrupt. The Great Depression was the direct result of the surviving belief in the magical properties of gold. It is to be feared that some similar superstition will cause equally bad results after the end of the present war.