This Post from Freisinnige Zeitung is republished with permission.

[This is part of my series on libertarianism. You can find an overview of all the posts here that I will keep updated: “Synopsis: A Critique of Real-Existing Libertarianism.”]

To create some suspense because I will go into a digression first: I posed myself the question of how I would make Ron Paul my fan if I were Putin. The regime in Russia is obviously the anti-thesis of what principled libertarians should want in their country. So this seems like a difficult task. But then I don’t believe the “principled” applies to Ron Paul or the “libertarian” because he has a very different worldview that he only articulates in libertarian terms.

Here is how I would go about it: Ron Paul is a “gold bug.” That is his weak spot. So I would try to target that. The really funny part is that I derived my prediction with minimal input, just because I found it convincing. And now I have googled it: And it is really how Putin and his stooges play Ron Paul and his groupies.

The digression is about the gold standard. I promise to keep it short because I may write more about the question at some later point in time. There are proponents of a reintroduction of a gold standard while practically all economists are against it. Ron Paul is in favor of a gold standard, like are many libertarians, although there may be qualifications that it could also be a currency backed by a basket of commodities, a proposal supported eg. by Friedrich von Hayek.

Advocating a gold standard is usually treated as a crackpot program, and the world “gold bug” is not exactly neutral here. What critics assume is that the question can be answered with a one-liner like it is impossible. But proponents will then point out that a gold standard really existed around the world from the 19th century on and was moderately stable. This shows that it can work to some extent, and so fans of a gold standard find the claim unfair that it would be a disaster. However, “not a disaster” is not yet a good point versus other monetary regimes.

If you read souces from the 19th century, you can see where the problem lies. Money could suddenly disappear and people had to scramble to get their hands on it. That could then lead to a credit crunch, which induced economic crises that were not that uncommon at the time. The introduction of a gold standard was — awkward for a certain type of libertarians —also a deliberate decision by governments. It came about in this way in Germany or the US. And that also means that governments could go off the gold standard again as did the UK during the wars against Napoleon, and both the UK and Germany during WWI.

Long-term deflation was perhaps not such a problem, but short-term shocks were. Still, it is not true that there was no inflation under a gold standard. You had that eg. in Germany from the late 19th century on although it was modest. Basically it worked via the issuance of bills that were in principle backed by gold and easier to use than gold coins. Now, in the current context there is also one thing you might need to know: Russia also had a “gold standard.” But due to the shaky finances of the country, a “Paper Ruble” was introduced, which developed into a parallel currency. Its value diverged massively from the “Gold Ruble” that did not play an effective role.

How did Ron Paul become a “gold bug?” I have not done extensive research here and so this is just my intuition. But it may not be that far off.

Ron Paul was probably little political until the 1970s. That was a time of high and rising inflation. If you think, as Ron Paul certainly does, that there should be no inflation at all, that must have felt scary to him. Also the Bretton-Woods system broke down, which was a weak form of a gold standard. Only the US backed the dollar with gold (but only in principle not with a promise to exchange bills for gold), while other countries pegged their currencies to the dollar at fixed exchange rates that were sometimes reset. Germany with an export surplus ended up with a lot of gold in turn, and still sits on the pile to this day.

Eventually, the US went off gold in 1971, and I would guess that that scared Ron Paul even more than inflation. In his worldview, gold IS money, and money should hence be gold. His intuitive understanding here is that “paper money” is worthless and fraudulent, only gold can give money an independent value. So in his take, events in the 1970s must have seemed like an evil ploy. Probably also for other reasons, eg. the failure of the Vietnam war and Watergate, Ron Paul apparently became politicized around the time.

He then happened to hit upon libertarianism in the Rothbardian fashion, which must have been a revelation to him because it explained how the government was behind it all. I would assume that Ron Paul had such a worldview already from the start, but here it got intellectual fodder. Apart from three points: a gold standard, isolationism, and hating the “government,” ie. the federal government in the US, as a sinister force, I would say that Ron Paul’s libertarianism was always superficial.

Personally, I would reject all three points, which does not mean I may not be critical of specific things that a certain government does. The first two are in my view mistaken and do not follow from libertarianism, which should not lead to specific positions on these questions. As for the hatred of the US government, I am willing to grant that not everything was good, but find the obsession bizarre where no comparison with really evil governments is possible.

What Ron Paul did at the time when the gold standard collapsed was stock up on gold. He must have expected an immediate catastrophe, and so this seemed like a smart move. If you listen to him, you can hear the reverberations of this outlook to this day. The “große Kladderadatsch” (the great helterskelter) as August Bebel would have called it is always just around the corner for Ron Paul.

Problem here is that it has not happened for more than four decades. But that does not faze him. His supporters have found a funny way to explain the failure of his predictions away: Ron Paul already predicted it forty years ago, that shows what a visionary he is! But then a forecast is not better because it has been wrong for a long time. This is just Doom Prophesy 101: Stick with your predictions, at some point something will happen that you can claim validates them.

When Ron Paul ran in 2011/2012, I checked the financial statements he had to make. And, of course, he had invested in gold to the max. I found that pretty dubious. Think about it: Chances Ron Paul would become president were low, even lower were the chances he would be able to reintroduce a gold standard. Still, if it had happened, his gold reserves would have appreciated by a large multiple: a gain of hundreds of percents. I would see a huge conflict of interest here that even Trump cannot match. I think Ron Paul sold some of his gold off, but I have not followed the story, so I am unsure. But then I am sure he has bought the gold back. And so his propaganda also has a very private motive behind it.

Now after this digression to the real question: How would I play Ron Paul as Putin?

The main thing would be to insinuate that Russia might go on a gold standard. Not only the historical precedent of the “Paper Ruble” in Tsarist Russia should make you skeptical. Putin’s regime would not give up control over the Ruble, which is a nice way of ripping the population off by deliberately printing money. Inflation in Russia was always higher than 4% from 2012 to 2017, and even much higher with a peak of more than 15% in 2015. It is curious that Ron Paul’s focus is on the Fed with a much more benign outcome, or his fans over here on the ECB. If you view the Russian government as one that wants to go on a gold standard any time soon, I have to be blunt: You are a total fool.

But then many libertarians are total fools. As I have written above, I first had my hunch, and then googled it. Here is how it works in real life and I was surprised how transparent the propaganda pipeline is:

  • Kremlin propaganda outlets push the story that Russia and China want to go on gold. Here is RT on that, and it is amplified by the usual network of grey sites like Zerohedge. If you do a search, you will see that this claim is all over the place. Note, that these are just some recent examples, but the propaganda has been going on for some time.
  • Now here is how it is picked up by the relevant segment of “libertarians.” That is the Mises Institute with a similar claim. And Lew Rockwell makes the connection obvious by republishing a post from Zerohedge.
  • And you guessed it, Ron Paul is also part of the propaganda: Here he is on his “Liberty Report” talking to a guest via Skype (hint: you can move the cursor to the right, use your mouse). This is in December 2017, and so it is perhaps clever for Ron Paul to focus on China and not mention Russia directly. That’s what his guest then does. And, of course, governments other than the US government do not suffer from the incentives that Ron Paul has identified with the Feds. They read Ron Paul’s stuff and, as perfect public servants, then implement his obsessions as policies for the general good. Every fool will understand that.

What’s even better than hyperventilating about “fiat money” is if you can cross it with some “conspiracy theory.” Ron Paul has been in the forefront here with his push to audit the Fed. His insinuation is that the gold reserves in the vaults of the Fed have been secretly sold off and that this fact is hidden from the public. He has been at it for more than a decade.

Of course, “conspiracy theory” and disparaging the US government is irresistible for Kremlin propaganda. If you look around, this is also all over the place and obviously it plays right into Ron Paul’s obsession and that of his followers.

  • Here are various accounts how transparent the Russian government is: one straight out of Russia, and then other grey sites magnify the story here and here (the list is not exhaustive by any means). If you are a fool, transparency by the Russian government sounds eminently plausible. As if the Fed could not do a similar photo op that proves literally nothing.
  • As it turned out with previous efforts, the gold in Fort Know is probably there. But then you can spin another story: the gold is not pure enough. Here is RT working on that story. (Plenty of grey sites again that amplify the topic, too.) Of course, you could never melt gold bars down to make them purer by a few percent. I mean it is in principle impossible. And we also know that this can only happen in the US, as for Russia we have photos. Potemkin was a known CIA agent.

I have not tracked down how this part of the story has percolated into the “libertarian” sphere, but I am sure it has. Here is my hunch how you could really get Ron Paul on your side as Putin. You would do this:

  1. You contact Ron Paul with a request. As he already knows, the Russian Federation plans to go on a gold standard. They have also the gold to back a currency up. (Never mind that this is not true, but he would not check it.) Now, you have this suspicion that there is a deep state of holdovers from Communist times in Russia who may have manipulated the numbers. You are so afraid that the gold might not be there or of low quality.
  2. You have already tried everything, and it looks good. But if the deep state, probably in cahoots with the CIA, is too strong, they might have sabotaged your efforts and that could bring the whole project of a “Gold Ruble” down. You are hence trying to set up an international commission of independent experts on the matter. If perhaps Ron Paul could help with counting the bars.
  3. And when he agrees, you would fly him to Moscow, put him in a room where people bring in gold bars. He would feel like in paradise with so much gold. Then you would let him count the bars, carry them out through one door and bring in further bars through the other. The people who have carried them out go in circles and then bring them in again. And Ron Paul would count until he drops.
  4. On the side, you could also let on that the Russian Federation wants to introduce a strict Second Amendment, so that the population can defend itself against an oppressive government (you have to keep a straight face here, though). And that they have thought about Ron Paul’s stance on isolationism and how it makes so much sense. They are just in the process of withdrawing their troops from Syria and Ukraine (after making those countries a part of the Russian Federation that is). They also don’t know how they got there in the first place.

Ron Paul would be totally floored: This is the greatest government in the world and in history!

Okay, I have parodied it a little. But I am unsure whether it might not happen literally in this way, or may have already. If you follow the links and do a little googling on Ron Paul, what actually happens is the slo-mo version of this and with a little more sublety, just a little. Who can fault Putin for treating fools as the fools they are. I don’t think I have given him any new ideas in this post. If he wants to he could do the “gold bar count” stunt, though. I would really be ROTFLing.

If you wonder what the handle “Freisinnige Zeitung” means. This was the name of a newspaper that was founded by the great German journalist and politician Eugen Richter in 1885. A literal translation would be “Liberal Newspaper.” The word “freisinnig” is made up of “frei” (free) and “Sinn” (sense, mind). The “-ig” is for an adjective, parallel with English “-y.” It is often translated as “free-minded,” which is one interpretation, but in the 19th century this was just the German equivalent for “liberal.” The term has fallen out of use in Germany proper and survives only in Switzerland where it has a similar, though more particular, meaning as the designation of a party that I am not associated with.