New Delhi, May 17 -- India's social capital deficit registers as a factor in its current account deficit through the demand for gold. Our appetite for gold is not an irrational cultural quirk. It is, in part, a revealed preference and a tangible symptom of our collective distrust in one another, society and civic institutions. More dramatically, economist Ajay Shah tells me that gold is a vote of no confidence in civilization itself.

Whatever people might say in opinion polls about how much they trust their government or their leaders, they reveal their true beliefs when they buy gold despite other assets being available.

Writing about the 19th century, historian Dietmar Rothermund noted that unlike Meiji-era Japan, surplus capital in I...