The article in the OP is right to the extent that some things/substances/etc. have more stable value than other things. But as Saddam said, that value is no more 'intrinsic' than anything else. Offer a starving man a lump of platinum or week's worth of food, and see which has more 'intrinsic' value to him. The same is obviously not going to be true of a well-paid worker in the west.
The scarcity of gold doesn't make its value any more 'real' than that of the dollar or the pound. It makes it more stable, or alternatively, less flexible, depending on your point of view. It is highly valued because it is stable, which is to say it is perceived to be stable. Tulips were a hot bet for a while too.
I'm not suggesting anyone should run out and bet against gold, but it's ridiculous to imbue it with 'intrinisic' value. We are the creators of value. Value originates within beings that have wants and desires. Just like anything else, gold is worth no more than how much other people want, which in turn etc. The gold standard originated from a very particular political situation. The contemporary idea that a gold standard or whatever is the solution to our problems is based on half-baked philosophy via Ayn Rand. Yes, gold has a value that is not defined by government, but that doesn't make it 'objective'. If Rearden metal was half as good as it sounded, Galt would have looked pretty thick with his gold.
Also, in terms of social history the article is laughable rubbish. How many people in Britain had the kind of comfort of living that we do when the U.K. was on the gold standard? It's hard to take comfort from the strength of a currency you have next to nothing of.
I don't know if you are trying to be philosophical or argumentative but the fact is this cerebral argument is nothing more than a thought experiment. Gold is pretty much the only thing with real value. You can't trade food. It spoils. You need something everyone else recognises. And that something is gold. I'm going to ignore your objections because this thread is about economics. Not philosophy.
People who support returning to the gold standard make these arguments. A lot of the most vocal proponents of a return to the gold standard in the US are self-professed Randians. The republican nominee for the Vice Presidency, Paul Ryan, is a huge fan of Ayn Rand, and is on record as supporting a 'commodity standard', which is just a slightly more nuanced version of the gold standard. In short, support for the gold standard is grounded in this discussion. If you don't know about it, perhaps you should do some reading, because the major supporters of a return to the gold standard hold that view for ideological rather than economic reasons.
And there is nothing 'cerebral' about the lack of flexibility inherent to being on the gold standard, or the fact that the value of the pound has nothing to do with prosperity in real terms. The article in the OP doesn't make any effort to address this, simply suggesting it might be because "mankind has advanced". This is so dumb it beggars belief. What matters is not the purchasing power of the pound, but the purchasing power of people.
Nations didn't come off the gold standard for laughs. It was hugely controversial at the time, and a major embarrassment for Britain when she was forced off the gold standard. Nobody wanted to do it, because there was a great deal of national prestige linked to being on the gold standard. However, many now believe that coming off the gold standard was good for her economy at the time.
A gold standard is not a terrible or crazy idea. But it's not necessarily a good idea, nor is it a magic solution to economic problems.
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