3 ms·

True, but gold is (and especially was) a store of wealth, into which "produce and labor of the nation" had been converted over time by European nations

• dredmorbius 2y ago
  No, it is not. Gold is, and has been, an exchange medium, in which national finances have been transacted, and a durable representation of wealth. It's useful in addressing balance-of-trade relations between state. But the overwhelming wealth of states is in their internal and external production and international trade of goods and services. Colonial-era Spain imported gold in vast quantities from the Americas, which did it little good as that didn't represent wealth but rather exchange capacity, and did little but bid up prices whilst reducing (in similar mechanisms to Dutch Disease and the Resource Curse) the real economic potential of the country (why raise grapes, cattle or other goods when you could get in on the gold exim trade instead)? Gold bankrupted Spain, ironically enough. Britain's colonial trade focused far more on goods: spice, cotton, sugar, tea, grain, wool, lumber, saltpetre, slaves, and the like. Those are both directly useful and contribute to infrastructure. Two things Spains gold utterly failed to do.