Imagine my surprise at the recent announcement that the U.S. will be issuing four new versions of the penny, the first of which comes out in February, in honor of Lincoln’s bicentennial. What a waste of resources… It’s time to join the rich world; it’s time to stop wasting resources; and it’s time to stop transferring taxpayer money as subsidies to zinc producers.[From Pennies: Enough Already! – Freakonomics – Opinion – New York Times Blog]
Surely the U.S. doesn’t more pennies does it, not unless the old ones are disappearing, which under the normal laws of economics you might expect. I imagine they are being smuggled over the border to Mexico because
all pennies up to 1982, which are made of a 95% copper alloy are worth twice as much as scrap metal than as currency.[From Pennies: Enough Already! – Freakonomics – Opinion – New York Times Blog]
Fascinating. But if you read the comments you can that there’s an element of conservatism about money (and an almost paranoid suspicion of any proposed change) the we e-money persons ignore at our will.
The comment that caught my eye came from Europe. Ever a pragmatic people, the Dutch may have opened up a grass-roots third way to deal with nonsense that is modern coinage:
I’m Dutch and we have the Euro as a currency… You can still pay your bill with 1 and 2 cent coins in my country, but we more or less agreed to stop using them. Shops started saying “We still calculate with the real prices, but we’ll only give you back coins of 5 cents or more. If your bill is € 19.97 and you pay with a 20 euro bill, you will get back 5 cents, if your bill is € 19.98 and you pay with that same 20 euro bill, you’ll get no change back. It’s simple, it evens out in the end and you get rid of the small coins because they lose their purpose. You don’t need Congress for that, just agree to stop using them. Shops hate them as much as you do![From Pennies: Enough Already! – Freakonomics – Opinion – New York Times Blog]
Power to the people! This struck me as a fresh way of thinking, so I contacted a well-placed (in The Netherlands) friend of the Digital Money Forum to ask him whether it was true or not, and he told me that it is. What’s more, this modus operandi saves Dutch society (and Dutch retailers) between 10 and 20 million euros per annum in reduced cash transports and, and this hadn’t crossed my mind before, reduced delays at POS. Why? Because distinguishing the 1 from the 2 from the 5 cent coins slows down cash transactions.
So there you go: bottom-up currency reform from the grass roots. I propose that us Brits rediscover our ability to change society, or at least society’s change, and go down the same route. If the change in a transaction is less than or equal to 2.5p, the shopkeepers should return nothing. If the change is between 2.5p and 5p, they should return 5p. We should all give our 1p and 2p coins to charity, and the charities can then melt them down fro scrap, take the resulting income and do something useful with it.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]