The metaphysics of gold

Why has gold always been—and maybe still is?—the ultimate universal equivalent for all goods?

To put it another way, what exactly is that "magical" quality that allows it to function as money throughout history (and why are governments today still obsessed with maintaining massive gold reserves?)

One explanation—a very physical, very practical one, mind you—suggests that one can slice it into equal portions, melt it down into useful items, it doesn't spoil like other commodities, it’s highly portable... and it's incredibly rare in nature.-----

But is there some other trick up its sleeve, or is that really it?
I mean, is there something more mystical, occult, or secret at play here? Is there any kind of metaphysical foundation behind this metal we all seem to worship? Has some eccentric philosopher ever actually tackled this subject and turned it into a coherent theory (aside from the endless attempts by all sorts of characters to hunt for the philosopher's stone and master the secret art of turning lead into gold)?

The luster is impressive☕

Because it’s the most expensive mineral out there? I don't know. 🤔 ...

There’s a section in Voltairean Candide where he and his servant Cacambo
happen upon the utopian city of El Dorado, where the streets are paved with gold
nuggets—just as our own terrain is covered in ordinary
stones. The two, caught up in the moment, start grabbing them, hoping to
stash some away for later, while the locals just watch them with a strange sort of curiosity, wondering why
they’re bothering with common rocks that are already everywhere and serve
absolutely no special purpose.

My take is that Voltaire used this witty scenario to highlight
how relative our perception of value actually is. In other words,
the worth of gold doesn't stem from its inherent properties, but rather from its
scarcity (it's often said that, on average, only about three parts per billion
of Earth's crust consists of gold). If we lived on a planet where one out of every five hundred
parts of Earth's crust was gold, there's a high probability that the perceived
value of it all would plummet significantly.

I’m not entirely sure what you mean by that—it feels like a bit of a cryptic shorthand, doesn't it? Perhaps a typo or some specific jargon I haven't quite caught up on yet. Regardless, if there was a deeper point you were trying to make, do feel free to elaborate! I'm always happy to dive into a conversation, provided we can find some common ground to start from. kaže:
There’s that one part in Voltaire's *Candide*—you know the one—where he and his servant, Cacambo, end up wandering through... well, let's just say they find themselves in a bit of a predicament while searching for something better.
It’s almost like stumbling blindly into a fever dream—one minute you're trekking through the dust, and the next, you suddenly stumble upon the legendary El Dorado. It’s one of those cinematic moments where the world just shifts beneath your feet. Imagine wandering into this perfect, utopian city where the streets aren't just paved; they're literally shimmering with gold. It sounds completely absurd, doesn't it? Almost too good to be true—much like those idealistic visions we see in *Candide*—but there's something deeply captivating about the idea of finding such impossible perfection just by chance.
It’s all about the clumping—just as much as how common certain terrains are under our local conditions, covered in nothing but ordinary...
...with stones. Two enthusiasts will start grabbing them, driven by the sheer desire to...
They’ve tucked them away for later—all while the locals over there just stand around watching with those strange, puzzled looks, wondering what exactly is about to go down.
It’s just common rock—the kind of stuff you see lying around everywhere—so there isn't really anything particularly special about it.
At your service.

The way I see it—if you’ll allow me my little moment of interpretation here—is that Voltaire used that incredibly sharp, biting wit to point us toward...
The sheer relativity of what we consider essential—it’s a funny thing, really. In other words...
The value of gold doesn't actually stem from its inherent physical properties—I mean, let's be honest, it’s just a soft, heavy metal—but rather from its perceived utility and... well, the collective agreement we've all made to believe in it. It’s quite fascinating, really—much like how one might analyze the philosophical leanings in *Candide*—where the "value" of things often relies more on our social constructs than on any actual essence. It’s a bit of a psychological dance, isn't it?
Rareties—though some folks claim they only show up at a rate of about three per billion parts...
(The very crust of the Earth is essentially just discarded gold). Wouldn't it be something if we could actually settle on a planet where every five-hundredth—well, you know what I mean—was actually worth something?
If even a tiny fraction of the Earth's crust were actually made of gold, our entire perception of value would just... collapse. It’s a wild thought—if something is everywhere, it ceases to be precious. It becomes just another layer of dirt.
His current values—if we can even call them that anymore—have lost quite a bit of their former weight. It’s a bit like watching a once-mighty empire slowly fade into irrelevance; there was a time when those principles stood firm, but now? They just don't carry the same punch they used to.

Well, I have to say—that explanation of yours actually holds quite a bit of water. It’s a legitimate point, really.
... no, that kind of explanation is actually already baked into the premise here:

I can be sliced into uniform pieces, melted down into all sorts of practical tools, lasts longer than most other products on the market, and—best of all—doesn't take up much space at all... In nature, they’re incredibly rare—almost like finding a needle in a haystack if you aren't looking in exactly the right spot.

It really comes down to that sense of rarity—that "star player" quality, if you will—as well as longevity. You know, how some things just seem to hold up better than everything else over time... whereas other stuff just falls apart. If we were looking strictly at the scarcity factor, I suppose a four-leaf clover would have just as much of a claim to being "pure value" as anything else.

But that leads us to the real question at hand: is there actually anything else going on here? I mean—beyond the standard, obvious explanation—you know, the one where we just assume things need to be universal equivalents simply to make exchange easier, more practical, or just plain less of a headache—is there more to the story? Has anyone actually come across a fringe theory or a "marginal" explanation for this? It makes me think of how Schopenhauer dives into the metaphysics of sex—that kind of deep, slightly off-the-beaten-path philosophical digging. Does such a perspective even exist?

Look, I don't think anyone is actually sitting here expecting a single, definitive, "one true answer" to be handed down from on high—certainly not an exclusive or perfectly precise one. It’s not like there’s some requirement for absolute certainty, either. It feels more like we're just offering a bit of a commentary—you know, a passing reflection on the matter—rather than trying to nail it down once and for all. There’s a certain validity in questioning things, isn't there? It makes me wonder if we should even be looking at the standard explanations at all... or if there might be something deeper lurking behind those classic, textbook justifications.

Let me try to be a bit more... specific about what I’m actually asking here.
I think I’ve finally grasped the intrinsic value of gold based purely on its function—it’s become clear to me why money holds weight even though, in and of itself, it possesses little to no actual value. But let’s be precise here: let’s treat gold as our proxy for currency moving forward just so we don't get tripped up by semantics. The reality is that gold carries value because everyone else recognizes what it can do—that is, its utility. In essence, gold is valuable because there is a collective social contract in place. Now, how exactly we arrived at that specific agreement is mostly speculation at this point, but it really circles back to what was discussed before—the sheer, practical necessity of having a universal equivalent. And so, through that lens of practicality, gold was simply chosen as the standard.
And now, one might ask—why gold, specifically? Well, if we look at the reasoning provided by that gentleman over there, he’s essentially arguing that it fulfills all those necessary criteria perfectly... which, when you think about it, makes a certain amount of sense.

But, well—
While gold certainly checks all those convenient boxes, I can't help but feel it ought to meet a more explicit criterion before I’d personally desire it—you know, a specific standard that would allow it to actually "enter circulation." It needs to be able to validate those "convenient" qualities that ultimately make it a universal equivalent. To put it bluntly—and I realize this might sound like I'm overthinking things—those "convenient" conditions are essentially just a way of anticipating what the future will require.
In practical terms, we’re looking at a massive variety of people all trying to trade their own unique goods for gold—which is perfectly fine; everyone is entitled to their own desires... or, honestly, I have no clue why anyone would even crave gold in the first place, but hey, if that's what they want, far be it from me to judge
And that right there is the crux of this whole "X factor" surrounding gold—because, when I look inward, I can't quite see what my own version of gold would be. Personally, I’d take a chocolate pudding over a bar of gold any day of the week, and I certainly wouldn't swap my dessert for gold/whenever! I don't have some sort of social contract established regarding a universal equivalent

So, it seems to me that

a) gold possesses some mysterious "X," and perhaps I am simply someone who loves gold

or

b) gold doesn't actually have an "X"—it just happens to have some convenient, handy properties—but in that case, it only functions as a universal equivalent based on some previous social agreement... which sounds a bit utopian to me; it feels like there's a logical flaw there, almost too sensational, almost too incredible (the idea that people—which people, exactly!??—would gather, reach a rational consensus, agree among themselves, and somehow sacrifice or ignore their immediate, tangible needs for the sake of a future benefit—like trading a pig for gold /if that gold currently means nothing more to them than an abstract concept of a future medium of exchange)

Sure, it’s rare, but let’s be real: platinum is even scarcer (and arguably more useful), and diamonds? They’re far more stunning than gold and serve plenty of practical purposes too.

I suspect the reason we use it as a "standard" is purely historical, rooted in how we’ve used gold since the beginning of time.
Look, gold is rare, sure, but for most of history, it was practically useless for anything else. Seriously, can you imagine trying to swing a sword made of gold? It would be too heavy and way too soft. It found its niche in jewelry, much like how bronze, brass, or iron were used for tools and weaponry. Because of that, it became an object of awe—and therefore, incredibly valuable! Once gold coins hit the scene, it only solidified its status. Since the coins matched the intrinsic value of gold jewelry, they became the ultimate standard of wealth.
If that weren't the case, anyone could just grab a handful of coins and melt them down into a necklace. Instead, goldsmiths became the gatekeepers of wealth for the elite and the aristocracy.

Old habits die hard, I suppose, which is why gold maintains such a massive price tag today. Even with modern technology, gold isn't just for show; it’s used in insulation, optics, and electronics. But even then, is it truly indispensable? Not really. There are plenty of other materials out there that often do a better job than gold ever could.

http://en.wikipedia.org/wiki/Gold

Go ahead, check the facts for yourself....

Diamonds aren't actually rare at all... honestly, just do a quick Google search and you'll see the truth about the whole diamond industry 🙂

That’s a really thoughtful question, and honestly, I find myself wondering about it too...

Especially when you consider that Native American tribes were also deeply invested in gold—maybe not on our scale, but certainly enough to shape their history. It makes me think that this isn't just some quirk unique to our specific civilization, but rather something much more universal to the human experience. It brings up this deeper, almost philosophical question: is there something more going on here, some underlying reason? Is there perhaps something baked into human nature itself that draws us toward gold, as if that instinctual pull toward "whatever shines" is actually a physical manifestation of an even deeper, internal longing...

I feel like there's something huge about how gold basically mimics the Sun—it’s got that same glow and color. (Besides, linking gold and silver as Sun-Moon isn't even that weird.)
And honestly, why is the Sun always our go-to metaphor for the ultimate Source... 🤔

It’s worth noting that in the early days—and I use the term "early days" very loosely here—there was no standardized way to measure value during trade; people essentially just swapped their surpluses for whatever they were lacking. It wasn't until later that a true standard of equivalence emerged, starting with items that held intrinsic utility—think animal pelts, for instance. This meant value was defined by a specific set of skills (hunting, tanning, etc.) balanced against the practical necessity of the goods themselves.

In that sense, there was a genuine, chaotic variety of local equivalents floating around. Because transporting, preserving, or even storing these various assets was such a massive headache, efficiency became the driving force—which naturally led to the gradual disappearance of any "currency" that couldn't hold its own against decay over time.
While gold likely gained prestige quite early on—largely due to its scarcity (those first nuggets found in riverbeds) and that unmistakable golden luster that set it apart from everything else)—its primary utility back then was purely ornamental. However, once we mastered smelting and modeling techniques, gold gained an extra layer of value as a medium of exchange. Plus, it didn't rot, and it wasn't a nightmare to move around... which allowed gold to function as a sort of supra-local value.
So, one must keep in mind that other equivalents were absolutely in play—silver, copper, amber, jade, precious stones—and gold only eventually stepped into the spotlight as the dominant player.

Given those specific traits—the visual impact, the rarity, the workability, the utility, the ease of storage, and its sheer resilience against the elements—gold became the ultimate candidate for money. And since money serves as a symbol of authority and sovereignty... well, to put it bluntly—to prevent gold coins from being melted down into jewelry or simply lost, governments realized they could issue paper currency backed by the gold sitting in their vaults. That is how gold became established as the reserve, the very foundation of monetary value.

So, there you have it—despite any valid criticisms you might have regarding my somewhat casual explanation of the matter...

The conversation seems to have gone cold... am I the one to blame for approaching this topic with such a "mechanistic" mindset? Listen, Snow White's Dwarf, I know exactly what you're after here. Ancient human culture was far more centered on intuition—it was "dreamlike," if you will—meaning there wasn't that harsh, jagged divide between dreams and reality that we deal with today. In that kind of dreamlike state, materiality was merely an image, a symbol of the spirit; even gold served as a metaphor, whereas you are searching for the lost spiritual essence behind that very symbol.
If the remnants of that intuitive culture were ever to be preserved, it would only be through thin, fragile threads of continuity running parallel to the recording of history itself.

Well, look—your "mechanistic" approach is fine, and it’s certainly a classic way to look at it, I suppose.
But honestly, those explanations feel a bit like *petitio principii* to me—you're essentially assuming the gold is already part of the exchange cycle, when the real question we're grappling with is precisely that: how, or rather, why does the gold enter the equation in the first place?

And just as you pointed out—which, if I recall correctly, is a sentiment shared by several other folks in this discussion—gold doesn't necessarily possess some inherent material utility... which means this realization pushes us right into that territory we might call the realm of spiritual values. Or, to put it in your terms, gold acting as a symbol! And yes, you've hit the nail on the head again: the real inquiry lies in the possible interpretations of that symbolism.

Now, if one were to argue that its utility lies in jewelry or decorative objects, even then, we are drifting back into the sphere of spiritual values. After all, we are presupposing a certain sense of beauty or aesthetics there—concepts that belong to the "delight of the spirit," if you will.

It's funny how many people immediately make that connection—gold shines (though, as the old saying goes, "all that glitters is not gold").
Then we have the interpretation that gold is akin to the Sun—and the Sun is the Source (which we strive toward... presumably, or perhaps it's simply obvious?)

...

So, that's the thread we're pulling on. But if someone—or perhaps they already have—could articulate this more clearly and explicitly, deriving a single coherent (if not absolutely certain) explanation, well, that is what everyone is searching for, haha.

...

Otherwise, I tend to think that every human culture, whether ancient or modern, is fundamentally the same. That is to say, humans—or man, in the singular sense—are identical in their very essence. In that regard, I don't see much in the way of "progress" or whatever it is people usually assume; the ancients were just like us. They lived simultaneously in both the material and the spiritual realms, and just as it was then, it is now: the material was "that first thing"—the most tangible thing you can grasp, the thing that moves you initially. To put it bluntly, for the masses, it's more immediate and more powerful. That's why materialism has always been present, and in my view, it has always been misunderstood as the final solution riddle world.
...

So, the real question remains: did those early eras possess any different insights? Were they closer to the "Source," as this spiritual theme keeps hovering around? And how does gold fit into that entire puzzle? It's a fascinating topic, truly.

mistyjackal14 said:That’s a really thoughtful question, and honestly, I find myself wondering about it too...

Especially when you consider that Native American tribes were also deeply invested in gold—maybe not on our scale, but certainly enough to shape their history. It makes me think that this isn't just some quirk unique to our specific civilization, but rather something much more universal to the human experience. It brings up this deeper, almost philosophical question: is there something more going on here, some underlying reason? Is there perhaps something baked into human nature itself that draws us toward gold, as if that instinctual pull toward "whatever shines" is actually a physical manifestation of an even deeper, internal longing...

Oh, I actually forgot to ask you one thing
where did that idea about Native Americans come from? Did you read somewhere specific, or do you just have a general interest in Native American history?

On the flip side, the stereotype usually shoved through movies and comic books is actually the exact opposite: those naive Native Americans handing over gold deposits to pale, pragmatic types in exchange for some cheap whiskey or trinkets