Economist Viktor Korenivsky's View on the Gold Standard
In a discussion with political scientist Yuriy Romanenko, economist Viktor Korenivsky argued that a return to the gold standard is impossible. He identifies the core issue of the modern economy as the detachment of money from real production, a shift that began with the Nixon Shock of the 1970s. According to Korenivsky, precious metals are physically incapable of supporting the vast scale of today's global markets.
Korenivsky noted that the idea of backing currency with gold is a persistent myth dating back to the era of Adam Smith. He emphasized that money must facilitate the exchange of goods, but the finite supply of precious metals cannot match the enormous volume of trade in our modern, information-driven world. As an example, he pointed to new economic realities where even a social media post can become a marketable commodity.
The Consequences of the Nixon Shock
Viktor Korenivsky also highlighted the consequences of the Nixon Shock, which severed the last formal link between major currencies and gold.
“The 1970s, the Nixon Shock, when currency was completely untethered, marked the de facto victory of speculative capital over productive capital,” he stated.In his view, this event led directly to the economic predicament we face today.
The economist stressed that when debates arise about returning to the gold standard, it is crucial to understand that the modern economy can no longer revert to such old models. He further argued that the concentration of resources in the hands of a tiny fraction of the population leads to systemic crises.
“We now see certain crisis conditions in the West and the U.S., demonstrating a great divide. 1% of the population concentrates an incredible amount of resources, which very often even surpass state capabilities,” Korenivsky concluded.
Korenivsky's views reflect ongoing debates about economic models and their adaptation to contemporary conditions. Given global challenges like resource inequality and technology's impact on commerce, the question of reviving the gold standard becomes even more complex. In an era of rapid financial transformation, finding new solutions to ensure economic stability and fairness is paramount. The legacy of the Nixon Shock continues to shape these discussions, underscoring how a single policy shift can redefine the global financial system for generations.