Basically every government in history used commodity money for millenia. (Perhaps I should have said "using commodity money" instead of "on the gold standard".

Basically every government in history used commodity money for millenia. (Perhaps I should have said "using commodity money" instead of "on the gold standard". That was inexact and inaccurate.) And yes, it turns out there are problems with such systems, like recessions. Fortunately fiat money administered by a wise and knowing bureaucracy, like in the United States, renders your economy totally recession-proof!!! cough cough and if there IS a recession you can just bail out all the banks and everything will be magically better!!! cough hack gaaaaag Anyway, the problem with commodity money (or the gold standard) is price instability when the real price of gold rises or falls because of wild swings in the supply or in national economic output. If you're Scotland and your number one trading partner is the rest of the UK and they do a half-decent job at price stability and your government holds lots of GBP, borrows in GBP, and issues bonds in GBP... well, you don't really end up having that class of problem.