Traditional Culture Encyclopedia - Traditional festivals - Why can't a country's national income be measured by gold and silver?
Why can't a country's national income be measured by gold and silver?
From ancient times to the present, the reserves and fiscal revenue of hard currency such as gold and silver are important standards to measure a country's national strength. However, in different historical development periods, there are also different standards with the characteristics of the times. In slave society, the measure of national strength is mainly based on the number of slaves and the scale of manual workshops. Later, the number of standing armies became an important reference for the country's military strength. In feudal society, the criteria for measuring national strength included territorial area, population, grain output, Niu Geng and the use of iron farm tools. Since the industrial revolution, steel output, raw coal output, railway mileage and even the total power of steam engines have become common measures to compare the economic strength of various countries. After World War II, great changes have taken place in the world industrial structure. In the United States and other countries, the proportion of primary industry dominated by agriculture has gradually declined, while the proportion of secondary industry and tertiary industry dominated by industry and service industry has increased. At this time, it is difficult to measure the national strength with materialized standards. After World War II, the Bretton Woods system linked the dollar to gold reserves. Since then, foreign exchange reserves have become a very important indicator to measure national strength. Gold is both a currency and a commodity. As a currency, it requires stable value. As a commodity, its value is affected by the relationship between supply and demand and cannot be stable. Therefore, it is not an ideal currency. As a currency, gold cannot guarantee the balance of international gold flow. Because the inflow or outflow of gold will affect the money supply of all countries, the inflow and outflow of gold can not be automatically balanced, which makes it difficult for the money supply of all countries to maintain an appropriate proportion with the gold reserves.
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