I am listening to an audio lecture by Walter Block on Austrian Economics. When he got to the section on money, he criticized Milton Friedman for objecting to the gold standard. This is almost a kneejerk response for Austrians. They don't seem capable of discussing money without ragging on Friedman.
What sort of monetary system would arise in a truly free society in the modern age? I do not know, and neither do the Austrians if they are honest. Instead of insisting on one particular kind of money, the Austrians should instead leave it to the free market to decide.
It would be as silly to replace the Federal Reserve with a mandatory gold standard (and matching central bank), as it would be to replace the Department of Education with mandatory homeschooling. The key word here is "mandatory". Let people choose for themselves what kind of education they give their childen, and what kind of money they will use to pay for it. While Milton Friedman's idea of an indexed money supply is not the ideal, how is it worse than a central government bank issuing gold certificates?
If Austrian economists really do want a free market in money, then they should say so, and stop using the term "gold standard". That term has become a shibboleth.
To quote Congressman Ron Paul,
"Repeal of legal tender laws would restore constitutional government and protect the people's right to use a currency chosen by the market because it serves the needs of the people, instead of having to use a currency chosen by the State because it serves the needs of power hungry politicians and special interests."