The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice.
Interpretation
Gold's value comes from its scarcity and the difficulty of obtaining it, which prevents it from being artificially produced.
In this quote, Henry Hazlitt emphasizes that the worth of gold lies in its limited availability and the labor-intensive process required to extract and refine it. Unlike currency that can be easily printed or manipulated by governments, gold's intrinsic value is derived from its scarcity and the natural limitations of its supply, which contributes to its status as a stable form of wealth.
In practice
In a financial seminar discussing the importance of investing in precious metals.
A man with a scant vocabulary will almost certainly be a weak thinker. The richer and more copious one's vocabulary and the greater one's awareness of fine distinctions and subtle nuances of meaning, the more fertile and precise is likely to be one's thinking. Knowledge of things and knowledge of the words for them grow together. If you do not know the words, you can hardly know the thing.
Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.
Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.
The only way we could remember would be by constant re-reading, for knowledge unused tends to drop out of mind. Knowledge used does not need to be remembered; practice forms habits and habits make memory unnecessary. The rule is nothing; the application is everything.
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Economics is haunted by more fallacies than any other study known to man
I am in favor of high wages and agree that the higher the wages, the stronger the evidence of prosperity, provided (and that is the important point) they are so naturally, by the effectiveness of industry, and not in consequence of an inflated currency or any artificial regulation.
I'm of those who believe that excesses in all matters are not a good idea, whether it's formation of bubbles, whether it's excess in the financial market, whether it's excess of inequality, it has to be watched, it has to be measured, and it has to be anticipated in terms of consequences.
A global economy is characterized not only by the free movement of goods and services but, more important, by the free movement of ideas and of capital.
There is no western, capitalistic country in which the conditions of the masses have not improved in an unprecedented way.
The focus of our public discourse has been on how American companies are competing with Japanese, German, and other foreign companies. What this allows us to ignore is how each of those American companies is really in competition with the families of the workers. That's the real competition.
The interests of the IMF represent the big international interests that today seem to be established and concentrated in Wall Street.
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