Much Ado About Something
Why humans would guard something that has no utility must have escaped notice there.
I'd like to know what kind of society the Martians in this allegory had. I mean, under what system of social cooperation were they able to arrive at the far superior technology required to observe humans from way off in the distance? Do the individual members exchange ideas, or goods? If not, how were they able to economize on scarce resources in order to produce their technology, or is there no such thing as scarcity in outer space? What motivates them to act? Are they centrally organized like a simple ant colony or collectively motivated like the coercive Borg in Star Trek, or is their division of labor organized by a complex but voluntary system of the free exchange of property titles, which here on earth forms the basis of civilized societies. If not, I wonder then why "anyone watching from Mars" would not also scratch their head about paying someone to guard this hoard, let alone of the concept of utility, especially to an "individual"? In fact, if such a system were so unfamiliar, what sense could a Martian make of any human action? Maybe the philosophy of exchange is not foreign to this observer.
If that were true, neither could a common medium be all that foreign. In fact, if our Martian observer knew anything of our history or of such a system of cooperation, the reasons for the puzzling activity would be no less clear to him than to any informed economist right here on earth. Corruption.
But let's fast forward the economic mumbo jumbo and cut straight to the chase. Since we're in outer space already, amongst superior beings, we may be forgiven for our excursion into a little fantasy.
Imagine that we had the technological capability to travel through time, and you signed up for an expedition that would catapult you, say, 5,000 years into the future, what would you choose as money to bring with you... assuming that you were only allowed to choose one of the following prospects?
Keep in mind that your decision could mean the difference between life and death!
I know your answer.
You already know what the Martians apparently don't. Aside from a few drunks and jail birds debating the merits between the scotch and smokes, I'd bet that most ‘humans' probably picked gold or silver.
The value of gold as the medium of exchange is a topic in itself but we don't have to go there today - we don't have to know why humans have preferred it to other goods to know that it has outlasted any of them. What other commodity, or currency, has survived as money for any similar length of time?
What has held its purchasing power better? Many of those above have been money at different times and different places, but scarcely any of them has been money as long as gold. Gold is one of the oldest, and it is still accepted where it isn't restricted by a state protected legal tender monopoly.
It was first coined at least 2500 years ago; it adorned Egyptian kings as far back as 4500 years ago; yet suddenly, in only the last three decades, it has apparently lost all of its utility, as if history vanished, and barbarism with it... as if empire and dominion, conquest and plunder, or any of those activities usually associated with the history of gold no longer exist. Indeed, for our Martian observer to be scratching his head over this implies that he must have only begun his observation in the last thirty years, and is totally ignorant about the 4500 years of human history before 1975. I'd say that's out of line with most Alien accounts, especially since widespread sightings of UFO's date long before 1975.
Gold has a monetary value, which can only mean something that is attributed by a market.
The state can say something is money but the concept of value being attached to something implies the market has a say. Allow me to contend that what this Martian observer puzzles over as a waste of resources is not the "utility" of the metal, or the question of why we bother mining it. If he only started with this utility as a given, implied by the act of guarding it, and wrote it off to some human affinity or other, what would really puzzle him is the same thing that should puzzle you: that the state would go to so great an expense to withhold such a desired thing from freely circulating. Indeed, the costs do not end with the remuneration of the security guards at Fort Knox, or wherever. They only start there.
Truth may not need the support of government, but fiat and fractional reserve bank notes do.
It takes additional resources to force individuals to accept something as money which isn't by choice; and if the integrity of this money is subject to the inflationary whims of a fractional reserve banking cartel, the costs can quickly pile up. Genuine savings are depleted, debased or frittered away... the control over the means of production compromised, inefficiencies burgeon, inhibiting progress and technological innovation, and instability reigns. Moreover, the policy undermines both the moral fabric of society and its adhesive force: the division of labor. Why would humans, as an observer who was not foreign to human history might astutely question, allow such self-defeating and costly institutions?
This, at least, is what puzzles me.
The answer is ignorance... induced by a misinformation campaign that is costly in itself.
The value of a sound money is that it prevents planners from redistributing the wealth and savings of the productive classes to the political classes in order to finance expensive unproductive agendas - or from depleting the savings of fixed income earners, or the wages of the poor... as Greenspan wrote many years before becoming a central banker: "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation" (published by Ayn Rand in 1966).
Alas, the Martian observer can no longer be confused about either the utility of this metal or the reason that it is being guarded (rather than allowed to circulate). Its absence from circulation has been answered: it is part of a scheme to raid the savings of productive classes.
The utility of this metal should thus be clear: it restricts the coercive elements of society and protects savings; it is but an instrument of the sound money principle... and it is interchangeable with the idea of freedom.
There is no way to understand the utility of gold - or to make sense of the entire activity described in the quote - if one does not grasp history, or these ideas.
Comedian Jerry Seinfeld, who specializes in irony, perhaps reveals the fallacy best when lamenting that if Martians were watching (human) dog owners follow their pets around with a doggy bag, they'd probably think that the dogs were in charge. Just what you need... another head scratcher.
¹ Son of a famous congressman who was a personal friend of Rothbard's and hard money advocate in the fifties