There is a shortage of coins in the USA because of the SARS-CoV-2 pandemic.
Some argue that the penny in particular should simply be eliminated.
https://www.nytimes.com/2020/07/29/business/coin-shortage-penny.html
Each penny costs about 2 cents to produce, according to a 2019 report by the United States Mint. Pennies accounted for 59 percent of the 12 billion coins the mint manufactured last year.
Some
people support the penny for sentimental reasons. It was one of the
first coins made by the Mint after it was established in 1792.
Another reason, offered by Americans for Common Cents,
an advocacy group that provides research for Congress on the value of
the penny, is particularly pertinent during a pandemic: Older pennies
are made mostly of copper, which is antimicrobial.
One path away from the penny might be found in civil society.
Civil society is the public/private realm distinct from the
government, on one end, and the private individual, on the other end.
Civil society refers to businesses, clubs, associations, and so forth.
https://en.wikipedia.org/wiki/Civil_society
Civil society can
be understood as the “third sector” of society, distinct from
government and business, and including the family and the private
sphere.[1] By other authors, civil society
is used in the sense of 1) the aggregate of non-governmental
organizations and institutions that manifest interests and will of
citizens or 2) individuals and organizations in a society which are
independent of the government.
If a major cash businesses like Walmart or fast food outlets simply
stopped pricing for pennies, the penny shortage would be significantly
alleviated.
The article alludes to how avoiding pennies — and nickels and dimes — would make life so much easier for businesses.
The article also explains how not using pennies would not hurt consumers because business round down as much as they round up.
The article also mentions that there was once a half cent in the USA that was eliminated in 1857 because everybody hated it.
https://en.wikipedia.org/wiki/Half_cent_(United_States_coin)
Adjusted for inflation, the half cent in 1857 would have been worth about 14 cents in 2019.
That means that by the standards of 1857, not only is the penny unnecessary, but so are the nickel and the dime.
It also means that back in 1957, the penny roughly had the today’s value of about 28 cents.
So today, the quarter would be the proper replacement of the penny.
Why do we even have coins like the penny, the nickel and the dime?
According to the internet, the nickel and dime cannot be eliminated unless the penny is first eliminated.
And Americans love, love, love the penny.
People love the penny because it has a warm, copper color and because it has Abraham Lincoln’s image on it.
If a new 50-cent or one-dollar piece that was bronze were printed and
if it had Abraham Lincoln’s likeness on it, then the penny, nickel and
dime would be eliminated.
This brings up a different issue.
Should all forms of cash be eliminated?
The new reality in a SARS2 world is digital payments.
People who only used cash are now using their smartphones to make digital payments.
https://www.nytimes.com/2020/07/06/business/cashless-transactions.html
Cash is certainly not dead. Before the pandemic, bills and coins were used for 80 percent of the transactions in Europe, and there are few signs that the pandemic is about to wipe it out.
Propelling
the trend is a surge in online shopping as homebound consumers turn to
digital tools for basic items. In the United States, 40 million
customers went online
for groceries in April. In Italy, where cash is king, the volume of
e-commerce transactions has surged more than 80 percent, according to
McKinsey & Company.
Visa reported
a surge in contactless payments for basic items in Britain after limits
there were lifted and a 100 percent increase from a year ago in the
United States.
There are problems with a cashless economy.
The authorities that manage the
world’s currencies say the dangers of going fully cashless are rife. In
tech-forward Sweden, cash has been disappearing so fast that
Parliament and the central bank asked commercial banks to keep bills
and coins circulating while they figure out what a cash-free future
would mean.
Consumer groups warn that vulnerable people risk being
marginalized. Many low-income earners and retirees, as well as some
immigrants and people with disabilities, have little or no access to
electronic payments and are increasingly shut out as banks cut back on
A.T.M.s and customer service.
Governments are looking at the possibility of switching to digital currency.
Central banks are looking at whether electronic currencies can replace physical cash. The Swedish Riksbank is testing a pilot version of a digital krona, or e-krona, that could keep the functions of a currency backed by the state.
“In
certain economies, there is still a role for cash, because it continues
to provide a benefit and a utility,” said John Velissarios of
Accenture, which is helping to manage the Riksbank’s test. “That’s where
the concept of things like digital central bank money is interesting,”
he said.
The adoption of government-backed digital currency might not mean the demise of cash.
But it would probably spell the end of bitcoin.
On the one hand, bitcoin would no longer be the first thing that most people think of when they think of virtual currency.
On the other hand, bitcoin might appeal only to limited, niche markets.
These customers might discover that bitcoin is less useful than they imagine.
Survivalist used to prepare for the end of the world by buying gold.
Nowadays, many of them are buying bitcoin.
But when the grid goes down, how exactly does one use bitcoin?
For that matter, how would one deal with all that gold while hiding in the forest and foraging for food?
In wartime, people in anarchic regions trade with cigarettes or alcohol, or they barter.
The topic of barter begs for a very brief history of exchange.
In a hint of things to come, it must be recognized that cash consists of coins and notes.
Coins have been around for a long time.
Banknotes are more recent.
https://en.wikipedia.org/wiki/Banknote
The first known banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions.[8][9][10] During the Yuan dynasty (1271–1368), banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century by travelers such as Marco Polo,[11][12] with European banknotes appearing in 1661 in Sweden.
Coins are “Lindy” compared to banknotes.
This is an allusion to the “Lindy effect”.
The projected future life expectancy of some non-material thing is about as long as the current age of that thing.
Things that have been around a long, long time will probably still exist a long, long time from now.
More recent things will probably not be around for so long.
https://en.wikipedia.org/wiki/Lindy_effect
The Lindy effect is a theory that the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy.[1] Where the Lindy effect applies, mortality rate decreases with time.
Again, this refers to non-substantial things like concepts.
“I [Taleb] suggested the boundary
perishable/nonperishable and he [Mandelbrot] agreed that the
nonperishable would be power-law distributed while the perishable (the
initial Lindy story) worked as a mere metaphor.”
For example, a particular old gold coin might get lost or discarded or melted down.
But the idea of coins and the technology of coin-making will persist.
What is even more Lindy than coins is barter.
In fact, one’s social and familial life might be seen to consist of various forms of barter that are carried out unconsciously.
That is, our personal lives involve all sorts of tacit quid pro quo.
In contrast, the world of modern work is compensated by money.
So, we still have a barter economy that is central to our lives, we just don’t think about it.
Cities would be another example of the confusion between the lifespan of material things and the life expectancy of the IDEA of that thing.
One might say that Damascus is more Lindy than Seattle because
Damascus is one of the oldest cities in the world whereas Seattle dates
back to the 1850s.
That assertion would be an error.
This is because it is the idea of cities that is more Lindy than, say, suburbs, which are parasitic off of cities, and thus more recent.
Even less Lindy than the suburb would be an “exurb”.
Exurbs have been described as the suburbs of suburbs.
That is, exurbs are “areas beyond suburbs and specifically less
densely built than the suburbs to which the exurbs’ residents commute.”
https://en.wikipedia.org/wiki/Exurb
An exurb is an area outside the typically denser inner suburban area of a metropolitan area,
which has an economic and commuting connection to the metro area, low
housing density, and growth. It shapes an interface between urban and
rural landscapes holding an urban nature for its functional, economic
and social interaction with the urban center, due to its dominant
residential character.
To some extent, much “small-town America” is no longer composed of semi-self-sufficient communities based on agriculture.
Many of the “rural” areas in the USA are commuter exurbs, where people drive to another suburb for work.
According to the Lindy effect, these so-called “rural” places in the USA would be very fragile economically.
In sum, cities would be more resilient than suburbs and exurbs, but perhaps less Lindy than agricultural communities.
But what exactly is a city?
In the USA, a city is where people in a metro area commute to work,
at the heart of which is the downtown central business district.
However, historically, “cities” were originally just towns.
There is no clear line between a city, a town and a village.
Arguably, if one were to journey back to ancient Athens — supposedly
the greatest civilization in history — it would be striking in its
village mode of existence.
In this case, it is better to talk about not cities, but settled life, which is less Lindy than nomadism.
In fact, settlements might have preceded agriculture.
The original settlements might have originally been temple complexes that date back 12,000 years.
Perhaps it was religious ritual that led to settlement, and this
paved the way for the development of agriculture two thousand years
later.
https://en.wikipedia.org/wiki/G%C3%B6bekli_Tepe
So, the most Lindy way of life would have been
- nomadic and based on
- barter.
That is, settled life and money are less Lindy than nomadism and barter.
Again, the issue is not particular physical cities or forms of money, but the idea of settled life and of cash.
The Lindy-ness of civilizations is a more tricky topic.
While a particular coin or type of coin is perishable, and the idea
of coins is imperishable, particular civilizations are to some degree
both perishable and imperishable.
This is because particular civilizations are cultural complexes — and thus non-perishable — just as much as they are material realities.
This applies to the city-states of ancient Greece.
Of course, Greek city-states together comprised a civilization.
But each city-state by itself was a distinct civilization just as much as they were physical cities.
After all, the backup plan for the citizens of ancient Athens in the
face of a Persian invasion was to load everyone in ships and move to
Sicily and reestablish Athens.
It would have been the same city in their minds because it would be
the same people with the same way of life, albeit in a different
location.
It can thus be tricky to say that a particular bricks-and-mortar city is Lindy because it is hundreds or thousands of years old.
For example, we can say that because the city of Rome is three
thousand years old that it will probably persists for another three
thousand years.
That might be confusing the material city of Rome for the Roman ideal.
For example, the science fiction writer Philip K. Dick had a dream in which a voice told him that “The empire never ended.”
That is, culturally, we still live in the Roman Empire, which presumably will last for another 2,500 years.
The material Roman Empire was overrun by Germans tribesmen.
But the kingdoms that these tribesmen established later became empires and republics along the lines of Rome.
The Lindyness of Italian culture was explained by an old Italian man in Joseph Heller’s “Catch-22”.
He explained to an American soldier that Italian civilization is
three thousand years old, and that — unlike America — it will still
exist three thousand years from now.
This is actually complicated.
If one is talking about nation-states, modern Italy has only been in existence only since 1870.
https://en.wikipedia.org/wiki/History_of_the_Kingdom_of_Italy_(1861%E2%80%931946)
The Italian nation-state has only been around for 150 years, so it might be expected to come to an end within 150 years.
The American civic-state has been around for 250 years, so it might be expected to last for another 250 years.
So, the actual Italian state might only last another 150, but Italian
culture will probably just keep chugging along for another 3,000 years.
But “American civilization” does not have such an assured future.
A distinct American identity did not exist until about 1800, and even then it was awkwardly maintained.
The conscious attempt to forge a distinct American culture might be
dated to around 1830, when Noah Webster published his modernized
dictionary.
So, the American state might last another 250 years, but an American
identity might only last another 220 years, and American culture might
only last another 190 years.
https://en.wikipedia.org/wiki/Webster%27s_Dictionary
Unfortunately, even talking about an “American culture” might be problematic.
To even speak of an “American civilization” seems weird — even like an oxymoron.
There is that old joke that the USA is the only country to go from
barbarism to decadence without an intervening period of civilization.
Again, decadence is not decline, but rather a period of complacent, self-indulgent, sterile prosperity that precedes decline.
In that light, the USA now seems like it is transitioning from decadence to a classic period of decline.
Decline is characterized by the absence of the “creative response to challenge” that originally built the society (Toynbee).
But unlike decadence, real decline in all its scariness can trigger fundamental reinvention and re-invigoration.
So perhaps the USA will last another 250 years.
And coins and cash will probably still be around then — at least, according to the Lindy effect.
Again, barter is more Lindy than coins, which are more Lindy than
banknotes, which are more Lindy than cryptocurrency and digital
payments.
So, barter might be an overlooked resource that we will all need to fall back on.
Thus, it might be a good idea to stock up on three months worth of
food the way Mormons do, as well as build up a barter network.
In fact, one might want to have a diversified portfolio of forms of payment, including:
- items for barter (and a network),
- coins,
- banknotes and
- digital payments.
In order to reinvent America and extend its lifespan, Americans need to create new coins.
The quarter was invented in 1796.
It might be worth about $4 today.
So why not create a bronze-looking $5 coin with Abraham Lincoln’s image on it?
Lincoln is, after all, on the $5 bill.
Once that coin is minted, pennies, nickels and dimes can be eliminated.
