The classical gold standard was the monetary system of the 1870s to 1914.
The world’s industrial powers defined their national currencies as a fixed weight of gold and paper money was freely convertible into gold by government and private citizens alike.
It was a golden age in many ways as the world experienced a sustained period of economic freedom and flourishing, with little of the social costs we experience today as a result of unsound money.
As Michael D. Bordo explains:
“The period from 1880 to 1914, known as the heyday of the gold standard, was a remarkable period in world economic history. It was characterized by rapid economic growth, the free flow of labor and capital across political borders, virtually free trade and, in general, world peace.”
Gold as the common money of the world allowed for easier international commerce. There was no need for business to worry about the impact of floating exchange rates.
Sound money meant high savings rates. This led to the accumulation of capital which was then able to finance industrial expansion.
The classical gold standard provided long term