All That Glistens

Book Review from the June 2001 issue of the Socialist Standard

The Power of Gold: The History of an Obsession . By Peter L. Bernstein. John Wiley & Sons, New York.

The author is president of his own economic consulting firm and author of seven books on economics and finance. He is also well-connected with powerful establishment figures, citing for example in his foreword the "significant assistance" of such as Alan Greenspan and Milton Friedman. In addition he also acknowledges the assistance of half-a-dozen researchers. So what is the outcome of such an undertaking into a fascinating subject? There is an astounding collection of stories, anecdotes and speculations on the subject of gold that embraces Biblical legends, Greek mythology, medieval nonsense and modern received wisdom, but nowhere will you find an explanation of what determines the value of gold.

The researchers have obviously been assiduous in their set tasks of tracking down just about every reference to gold they could find in Ancient and Modern History. No expense has been spared in tracing what Moses, Job, Herodotus, St. Thomas Aquinas, Pizzo or Newton had to say on the subject. But nowhere a mention of what determines the value of gold. We can understand that Bernstein and his team of researchers would ignore the ideas of Karl Marx, because of their background and aspirations, but it is a pity one of them hadn't taken a day off from his research and spent an afternoon in a local cinema watching a rerun of The Treasure of Sierra Madre.

He would have seen the Humphrey Bogart character bemoan to the old prospector in the flophouse about how it was a pity gold was so difficult to find, and the Walter Houston character reply, "Many men search for gold, very few find it. Therein is the value of gold." It's as simple as that. The value of gold is determined, like all other commodities, by the amount of socially-necessary labour time spent in its production.

If you want a lot of colourful anecdotes about some of the crazy things people have said and done about gold, then this is the book for you. If you want to know something about the value of gold, and how is determined you would be much better employed reading the 100 or so pages of Part 1 of Marx's Capital, Volume 1. Alternatively look out for the next TV rerun of The Treasure of Sierra Madre.

The Late Richard Donnelly 

(Glasgow Branch)