W.J. Stein: Gold in History and in Modern Times

This study on ‘Gold’ has an important place in the life and work of Walter Johannes Stein. At the time he wrote this study, he came into contact with Daniel Nicol Dunlop. It was also the time of the Great Depression after the stock market had crashed in 1929. While the study is about gold, W.J. Stein frequently takes the opportunity to write about related subjects such as national identities and the economy as a whole. We publish this study because we think it can be of large interest to those aiming to understand the role of gold in an economy, and more broadly, to understand the world economy.

To familiarize the reader with gold, including its perils, W.J. Stein gives a brief history of gold resorting to historic accounts, sagas and legends, ranging from the old Persians, to the Nibelung, to the Knight Templars and the Spanish seafarers. He shows how gold, which has a religious origin, slowly transformed into “mere money”; it secularized and thereby gave rise to new problems and possibilities connected with the use of gold, including its function in the economy.

The proper function of gold, according to W.J. Stein, is to provide economic stability. However, different distortions, such as the artificial storage of large amounts of gold or the ban on free gold trafficking, often prevented gold from fulfilling its potential. In other words, Stein argues that political forces use gold to interfere with the peaceful development of economic life.

Realizing the consequences Stein writes, “It [gold] becomes more and more a commodity and no longer performs the regulating function as of old, that is to say, mankind is now faced with the task of carrying out in clear consciousness the regulating functions that gold had hitherto effected automatically.” He later tells us bluntly: “Eliminate gold and politics and hand over the whole money system to an expert body who, with true economic insight will carry out their instructions to bring order into the world’s book-keeping system. Then we shall see what currency really is, as defined by Rudolf Steiner: ‘Currency arises from the wise organisation of the whole economic system through its administration.’”

If one looks at the contemporary situation, this study seems not to have lost any of its relevance. Investors flee into the safety by investing in gold, which is reflected by the record price of gold. It almost seems that the current system that facilitates (and arguably already did to some extend facilitate) the transition towards a world-economy – the current currency system – may not be an adequate solution anymore. For example, was it designed to cope with the growing trade imbalances between the East and the West? At the same time, gold may also not carry the answer anymore, as it has proven extremely vulnerable to political control.

The question that emerges clearly and urgently from this study is, how can we organize a world-embracing system of currencies that is immune to politics, in other words, that is independent and makes inherent economic sense?

Please find the study here.

Side note #1:

In the opinion of the editors, W.J. Stein’s succinct characterization of nationalistic thinking may prove valuable in analyzing the current state of affairs. Especially the currency situation provides a dangerously fertile ground on which nations around the world seem to succumb to nationalistic thinking. One sentence we want to highlight:

“Only a system of world-economy guided in the right manner and extending over the whole Earth can enable the individual human being to develop his national individuality in complete freedom and thus make it possible for nations to express the methods and pace of production that are native to the national spirit of each.”

Side note #2:

Another interesting quote from this gold study we would like to highlight is:

“Insight which embraces a comprehension of the way in which changes in the process of economic life penetrate into and affect human consciousness, alone offers any prospect of enabling human consciousness to comprehend the nature of economic life in full clarity and thus become capable of guiding and directing it.”