Back in the olden days – before World War I – gold was money, governments balanced their budgets and trade between nations balanced. Sound money, balanced budgets and balanced trade were the core principles of economic orthodoxy and the foundation stones around which all classical economic theory was built.
Capitalism worked the way it did because gold (or more precisely a gold-based monetary system) would not allow it to work any other way. The gold standard forced governments to balance their budgets and it forced trade between countries to balance.
In the 19th Century, if a government spent more than it took in as taxes, it had to borrow money to finance that budget deficit. When gold was money, there was always a limited amount of money in the economy and governments could not create