fiat metal

I've written plenty on language banditry, especially the appropriation of ideological, legal, and economic terms.

Here's a word I bet you didn't realize had been appropriated by the state, its meaning changed so radically that it has almost reversed itself:

"COIN"

A coin is a type of packaging for valuable metal.

What we now call coins aren't really coins -- not by the original meaning. They're actually tokens. A token is a representative of something else -- not money, but a money substitute. Think poker chips.

Once upon a time, coins were the most valuable money, because they were the only real money. Bank notes weren't money, but again, money substitutes -- promises of money that were more convenient than the silver and gold coins they represented. Now our so-called coins are our least valuable money. "Pocket change." Why? Well, for one thing because they're cheap metal tokens.

When I was growing up in New York City, a token was the coin-like-thing you used for subways and busses. It said "NYC" on it, and the Y was cut out of the metal -- a Y-shaped hole between the angular N and C. As a small kid, I once called the subway token a coin and my parents corrected me. "Why isn't it a coin?" I asked. "Because," they explained, "it's not really money -- you can't spend it outside the subway." (That wasn't true: I found a pizza place where a slice cost 75 cents and the immigrant owner thought a token was worth a dollar. I could pay 60 cents to buy a token (circa 1980), then go to the pizza place where I could spend it on a slice of pizza and get back a quarter. It took me longer than it should have to feel bad about cheating the man.)

Another strange thing about the old subway tokens is that their edges were completely smooth, whereas the "coins" I was used to -- dimes, quarters -- had rough edges, which I now know to call milled edges.

Why, you might wonder, do 21st-century dimes and quarters have milled edges?

A token is to a coin what a promissory note is to cold hard cash. (And notice the words "cold" and "hard" before the word "cash" and ask yourself what "cash" must have once referred to.) Coins used to be gold and silver. Popular coins were the ones that bore the mark of a reliable mint so you could know that they held a certain weight and purity of precious metal. Think of a modern gold bar and realize that that's what a gold coin used to be.

One problem with coins was that people would clip or shave the edges, hoping to pass the clipped coin on at face value, while saving up enough clippings to melt them down and sell. As clipped coins became common, prices adjusted to the lower-valued coins. Price inflation before fiat money. Inflation is the result of fraud, but that fraud can be either private or public. (I won't here go into the history of kings, minting monopolies, and the debasement of government currency. You can read all about it in Murray Rothbard's What Has Government Done to Our Money?)

Milled edges were the solution to coin clipping. You could feel the rough edge around a coin and know that it hadn't been clipped or shaved -- that it held the full weight of its face value.

Now that our so-called coins are made of cheap copper and nickel (or are nickels also made of copper now?) instead of silver and gold, they have become tokens -- symbols, rather than packages. A clipped gold coin really was worth less than its face value because its face value was based on its original weight. If you tear a corner off a paper fiat dollar, it still trades at the same value. If you shaved the edge of a Susan B. Anthony or Sacajawea dollar, it would maintain its face value. Why? Because it's not really a coin. Its weight is irrelevant. It's just a token.

So why do our tokens have milled edges?

So that they feel like coins. So that we'll think of them as coins. So that we won't notice that we no longer have real coins.

I can't run my thumb across the edge of a quarter without thinking about what government has done to our money.

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Update

"Mr B" (1, 2) adds his, um, 2 cents worth:

And now, some more "coin" tidbits I found while researching the question of what nickels are composed of nowadays. First, I didn't remember nickels having the reeded edges. I checked my pocket change, and my nickels and pennies are smooth. That makes sense since they don't appear to have ever been made of precious metals (and I don't count silver-containing "half-dimes" as "nickels"). According to the wickipedia article, nickels have been made of 75% copper and 25% nickel since after the War Between The States. And, according to the U.S. Mint list, since 1982 pennies have been composed of 97.5% zinc and 2.5% copper. Up until then they were composed of a few alloys consisting mostly of copper. Pure copper pennies only lasted a mere 44 years from 1793 to 1837.

You can still get gold and silver coins from the U.S. Mint (as well as the Canadian Mint) in addition to the gold bars you displayed in your article. U.S. American Gold Eagles are 0.9167 gold and the balance is a mix of silver and copper (according to this source). Canadian gold coins are .9999 gold. U.S. silver coins appear to be listed as 99.9% pure, whereas the Canadian silver Maple Leafs have .9999 stamped on them. There are also a host of private label silver coins, including the one I wrote to you about. The problem with the gold coins currently produced is that even the smallest size is still way too valuable for many everyday purchases. The silver coins are better, but they only seem to be readily available in 1 oz sizes. That's still too valuable for really small purchases. And then there's the problem of re-educating the public...

Anyway, there's my two copper-plated-zinc-token's worth.