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The Scandal of Money: Why Wall Street Recovers but the Economy Never Does

George Gilder

3.95 · Rating details · 167 ratings · 25 reviews

"Why do we think governments know how to create money? They don't. George Gilder shows that money is time, and time is real. He is our best guide to our most fundamental economic problem." --Peter Thiel, founder of PayPal and Palantir Technologies

"Thirty-five years ago, George Gilder wrote Wealth and Poverty, the bible of the Reagan Revolution. With The Scand ...more

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Kindle Edition, 224 pages

Published March 28th 2016 by Regnery Publishing

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Oct 07, 2016 Douglas Wilson rated it really liked it · review of another edition

Gilder is always an encouraging author, and this book is no exception. If you have a hunch that the world is run by monetary monkeyshines, this book will make the case.

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Jul 09, 2016 Zachary Slayback rated it it was amazing

If you have ever driven through the rustbelt and wondered why communities outside of Detroit and Cleveland can't seem to feel the wealth of cities like New York, Boston, and Chicago; if you've ever gone back to your hometown in rural America and noticed how many shops had closed up and were not reopened after the Great Recession; if you've ever wondered why so few people seem prepared for retirement or even seem to care about the relationship between money and value; or if you've wondered why so If you have ever driven through the rustbelt and wondered why communities outside of Detroit and Cleveland can't seem to feel the wealth of cities like New York, Boston, and Chicago; if you've ever gone back to your hometown in rural America and noticed how many shops had closed up and were not reopened after the Great Recession; if you've ever wondered why so few people seem prepared for retirement or even seem to care about the relationship between money and value; or if you've wondered why so few of the massive tech startups have gone public and why they are inaccessible to people outside of established institutions, you have to read this book.

George Gilder (whose Knowledge and Power was his first book I read) presents a cogent and persuasive case that the growing feeling of inequality is rooted in the separation of money from value and knowledge from growth. Without a clear standard against which investments can be set and against which we can compare the present to the future, we are left to the machinations of political institutions and those savvy enough and well-enough connected to play the financial game. The dissolution of the gold standard disconnects the present from the future and money from both. Gilder explores a number of alternatives, including going back to a gold standard, a dollar pinned to a bucket of commodities ("a Hayek Standard"), and a currency like bitcoin/bitgold.

If you are wondering why most of America feels like it is being left behind by the economic progress of the coasts and why wages and savings don't reflect any rational connection to perceived technological progress since the 1970s, you'll want to pick up this book.

For me, personally, Gilder presented the most convincing case for taking bitcoin seriously as a currency (or as a standard for currency) and provided the much-needed economic foil against which theorists like Putnam and Murray can be compared for their sociological observations concerning the decline of America's mainstreet and the perceived rise in inequality.

I only wish it had been longer. ...more

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Aug 15, 2018 Stan rated it it was amazing

Shelves: 2018, investing

This is an exceptional book. I don't believe you can just read through it and really understand the points he is trying to make. These concepts are deep and require a lot of thought.

Western culture has become thoroughly indoctrinated with the idea of looking for something that appears to be a problem, giving the problem a clear definition, and then developing something to fix it. We have become obsessed with this. We have millions of highly credentialed "experts" and are minting tens of thousan This is an exceptional book. I don't believe you can just read through it and really understand the points he is trying to make. These concepts are deep and require a lot of thought.

Western culture has become thoroughly indoctrinated with the idea of looking for something that appears to be a problem, giving the problem a clear definition, and then developing something to fix it. We have become obsessed with this. We have millions of highly credentialed "experts" and are minting tens of thousands more every year; they are all searching for problems to define and solve. We do this in medicine, education, economics and government. And, since this mentality has permeated every aspect of our culture, there is probably no area of our lives that has not been impacted. Too frequently the "problems" we see on the surface are symptoms rather than underlying causes. Unfortunately, searching out root problems and fixing them is often not financially rewarding or very exciting. While treating symptoms can be very lucrative and fascinating—at least in the form of a few minute sound bite for television: a pill for this, a stimulus package for that, you'll be happy when you borrow to get that ..., a process to make your child a genius, and all with near-immediate results.

This book will never be popular and will be discounted by many who read it. Gilder is looking for the root problems, the very foundation of much that plagues our culture. It is not very exciting stuff, it requires hard work to understand, and nobody is going to get rich by understanding it—certainly not in the near-term, but not in the long-term either because solving the real problems related to money would shake the very foundations of our economic infrastructure, would likely be painful in the near-term, and would reduce power and control in established institutions.

There are others—some may even read this book—who will counter everything that Gilder posits here. As with most things, there are differing perspectives usually accompanied by some type of benefit to those expounding them, Gilder not excepted. The only way to gain some inkling of what might be real is to study these differing perspectives and draw your own conclusions. For me, Gilder is close to seeing the root problems. ...more

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May 16, 2019 Jay rated it liked it · review of another edition

Shelves: audiobook, business

I read a couple of Gilder’s books on technology back a few decades when I was in college, and I must say that they had an impact in how I thought about the march of technology. I thought I would read one of his more current books to see if I could glean any other simple-to-repeat insight into economics, and from this book I got one. I won’t judge the veracity of this claim, but Gilder says that gold maintains its value because it can be mined, and mining requires time and money and resources. An ...more

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Jul 13, 2016 Charles J rated it it was ok · review of another edition

George Gilder is famous among conservatives. For decades, I have heard positive things about him, primarily for his work in supply-side economics and, more recently, in technology. “The Scandal of Money” is an unsuccessful attempt to combine the two. Criticizing both Left and Right, and most of all Wall Street, Gilder calls for unleashing economic growth through a monetary restructuring—namely, a return to the gold standard, buttressed by Bitcoin.

Maybe we do need a gold standard. But Gilder does ...more

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Jun 06, 2020 David M. rated it really liked it

I’ve been listening to Gilder’s books systematically by accident. I’m not sure I meant to read them chronologically in order of writing, but that seems to have happened naturally. This book has a lot of repeat material. Gilder tends to write that way. I’m not complaining. His concepts are important, valuable, and complex enough that repeated exposure is really helpful. But that being said, Knowledge and Power contained quite a bit of information that was already presented in Wealth and Poverty. I’ve been listening to Gilder’s books systematically by accident. I’m not sure I meant to read them chronologically in order of writing, but that seems to have happened naturally. This book has a lot of repeat material. Gilder tends to write that way. I’m not complaining. His concepts are important, valuable, and complex enough that repeated exposure is really helpful. But that being said, Knowledge and Power contained quite a bit of information that was already presented in Wealth and Poverty. Scandal has an even higher proportion of rehashed greatest hits. In fact, this book seems to be a truncated version of Knowledge and Power more than anything. (And The 21st Century Case for Gold, which I’m also nearly finished with, has almost no new information at all.)

But again, I have no problem with this. It just needs to be pointed out.

In part because of that dynamic, and in part because I’ve been drinking these down back to back, his books are all mixed together in a stew in my head. I’m gleaning various takeaways at different moments, including new ones when he repeats (at times verbatim) large sections from previous books.

One key helpful point for me has been an upending of how I view and understand investing. The concept that struck me as I listened to guilders chapter on insider trading, and his continued insistence that we should allow it, is that investing is hardly the same thing as trading. Furthermore, I think these concepts are often conflated and misunderstood. Specifically, trading is not investing any more than a person buying a piece of property at an auction and turning it around to resale at next week’s auction should be considered a property mogul. Trading in the stock market has become a glorified parallel to professional poker playing. Investing requires knowledge and some substantial time. This is important for several reasons. Gilder makes many of those reasons very clear, and a few more have developed in my own head.

The whole gist of Gilder’s arguments, across most of his economics books, is for intelligent investment that leads to wealth production. Thinking about investment in terms of giving rather than getting is actually a pretty sharp turn, and it makes all the difference. Until we learn to think about investing from the standpoint of wealth production, not making a quick buck (day-trading), or simply beating inflation (long-term / hedge fund investing), intelligent investing can't really begin. I could go on, but I won’t.

The last chapter really brought it together. Gilder writes about the blockchain, it’s relationship to gold, time, floating currencies, and gives us a portrait of where things ought to, and just might go next. ...more

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Jan 12, 2019 Bruce rated it really liked it · review of another edition

Shelves: economics

This book was difficult for me to read primarily because of its complex language. It is worth laboring through because its message is true. The Message is that the meaning of money has been distorted by self protecting politicians/governments. The net affect is that the growth in the money supply is going to people and organizations that do not produce, they simply redistribute money/value. The sequence reminds me of the Satanic Bible, which preaches that anyone who in dumb enough to be taken ad ...more

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Dec 12, 2020 Kyle Stephen rated it liked it

There's a really interesting intuition here about money et al. being a channel along which signals passed to investors carrying information germane to learning and capacity for meaningful innovation. Less noise in the channel = clearer hearing capacity of the subtle.

Book also has some astonishing information about 1) the FOREX world and 2) how insider trading regulations have empowered conglomerates.

Sadly, I don't think a physicist reviewed this -- it's replete with statement's that don't make ...more

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Aug 25, 2019 Lukas rated it did not like it · review of another edition

I understand it takes years of exposure to financial industry to properly conceptualise money and other financial stuff. And who doesn't understand something. Like banking. Gets to blame it for everything. Financial crisis is related to credit deflation not money manipulation. Books which talk about Financial Crisis without mentioning debt service crisis and deflationary deleveraging are very suspicious in deed. On the edge of populism and libertarian delusions.
The author is simply using to many ...more

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Oct 30, 2018 Johns rated it really liked it

Shelves: amer-history

Mr. Gilder takes some getting used to as you start this book. Stick to it: this is a worthy read. Bottom line: the author would rather that the USA return to the Gold Standard so casually abandoned by Mr. Nixon in 1971. He also recommends that we take advantage of the blockchain revolution and adopt a digital currency which would facilitate reliable commercial trade without the dominance of a central bank run by greedy, politically-driven overseers. Read the whole book (and some of Gilders other ...more

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Nov 17, 2020 John rated it really liked it

Time as a value of/for exchange.

Time as a constant in order to relate value exchanged...in order to establish equity of the medium of the referenced and mutually recognized medium of/ for that which is exchanged.

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Dec 26, 2018 Andis Harasani rated it it was amazing

Such a powerful lesson in monetary policy. Every page full with powerful ideas and lessons. Brave ideas and a revolutionary road map of the future monetary policy. Money is time and time is real!

A must read

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Nov 13, 2020 Christian rated it really liked it

When fiat currencies create a market where everything becomes more expensive because labor is unlinked to time. Productivity goes stale, capital investment declines, and middle class shrinkage become the quo.

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Feb 20, 2020 David Bruyn rated it really liked it

An insightful look at the hokery that is modern fiat currency.

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Jun 28, 2017 Seth rated it really liked it

Gilder is always a pleasure to read. Stretching and stimulating, contrarian yet intuitive. He's a polymath who never seems partisan or ideological. The best supply-side prophet out there. ...more

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Jun 26, 2019 Chris Denz rated it really liked it

To make a long story short, we should revert back to money backed by gold.

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Nov 07, 2020 Aaron Ventura rated it really liked it

Very good.

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Jan 23, 2018 Matt Rudnitsky rated it it was amazing

99 Stars

Required reading for anyone interested in money. Ironclad, compelling argument on why our current system is a joke — and an outline for the future.

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May 31, 2019 Antoine Balaine rated it it was amazing

Shelves: economics, society, 2019

Thank you George Gilder for writing such an incredible book. The English it's written in is of a level I never knew existed. And I feel more capable of understanding the world now. ...more

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May 11, 2016 Drtaxsacto rated it it was amazing

George Gilder has forged so many new paths this short book is no exception. Coming off his prior book on Knowledge and Power - Gilder examines why a lot of the actions of central banks are actually destructive of middle class wealth. He argues for alternative monetary regimes (including gold and possibly electronic exchange mechanisms like Bitcoin) that he believes could help correct for current problems in the system of central banks.

He is not a fan of writers like Robert Gordon or Thomas Pike George Gilder has forged so many new paths this short book is no exception. Coming off his prior book on Knowledge and Power - Gilder examines why a lot of the actions of central banks are actually destructive of middle class wealth. He argues for alternative monetary regimes (including gold and possibly electronic exchange mechanisms like Bitcoin) that he believes could help correct for current problems in the system of central banks.

He is not a fan of writers like Robert Gordon or Thomas Piketty - both of whom now argue that we have entered a period of slow economic growth. With the right economic policies we could get back to earlier levels. But that is a very high hurdle. Policies like Sarbanes Oxley and Dodd Frank have discouraged small business startups - the level of IPO funding (even though it is recovered a bit) is still well below historic levels. At the same time he describes the paradox of the sophisticated buyer rules which discourage small investors from helping to fund startups while encouraging true insider traders like Warren Buffett or Jeff Immelt to exercise their unique expertise by taking companies private. All of these things come from too much regulation.

He is also not a fan of currency arbitrage -which he describes as mostly non-productive. Although the value of currency arbitrage is huge it benefits only a very small number of traders.

Quantitative easing, in Gilder's thinking did a couple of things. First, by keeping rates artificially low - it diminished the value of savings - and as he points out money is really bounded on a reference of time. He claims (and I think this might be a bit of an overstatement) that defined benefit pensions began to deteriorate at the point that Nixon unbounded the dollar from a clear exchange rate. Second, it discouraged investments in new startups and small businesses.

He makes a credible argument that Chinese monetary policy (which tied the Yuan to the dollar) was actually not manipulation but a sound policy for China and for the rest of the world. One of the interesting facts in the book is that with the liberalization that took place in China they actually spend a smaller fraction of GDP on government than we do. ...more

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Apr 10, 2016 Vance rated it really liked it · review of another edition

Shelves: politics

Enjoyed this book. It provides a thorough analysis of the debasement of the US dollar and the repercussions since FDR took the nation off of the gold standard and then Nixon closed the gold window.

The author makes a good case for going back on the gold standard to have a credible money as a medium of exchange. The book also explains the costs of massive government overreach in other areas, but the main focus is on money.

I remain skeptical that the gold standard is the solution. A huge concern ...more

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Mar 29, 2016 Ronald J. rated it it was amazing

Shelves: adam-smith, austrian-economics, business, capitalism, conservatism, economics, economics-human-capital, entrepreneurship, everyday-economics, future-trends

I think Gilder deserves a Nobel Prize in economics for his advancement of information theory to not only entrepreneurialism, wealth creation, and growth, but now for monetary policy with this work. Brilliant explanation of how and why Milton Friedman, and Keynesians, got it wrong. This book will convert you to a goldbug, but it might be of the digital variety. Highly recommended.

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Oct 12, 2016 Pedro L. Fragoso rated it really liked it

A serious, interesting and relevant essay on the nature and significance of money.

"Since existing moneys fail to perform the key role of money as a measuring stick, we currently live in a world without money. What people call money is actually mere credit and debt with no reliable unit of account." Amen. ...more

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“If the government controls, guarantees, channels, or directs investment, it is not capitalism. Pivotal to the investment process is interest rates. For entrepreneurs to control capital, interest rates must reflect its real cost rather than merely the cost of printing money. Otherwise the money printers will dominate investment.” — 3 likes

“The economy is a test and measurement system, and it requires reliable learning guided by an accurate meter of monetary value.” — 1 likes

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