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Fool's Gold

February 22, 2000

Tags Money and BanksGold StandardMoney and Banking

The new Sacajawea dollar coin is an offense, starting with its color. It is supposed to summon the memory of the gold standard, when the dollar was something besides a government-issue piece of paper. Money was just another name for a real commodity that facilitated exchange and held its value independent of government’s blessing. Liberty thrived because the government wasn’t the owner and controller of the means of economic exchange.

When free-market economists say that freedom and gold go together, they mean the metal as a market-chosen money, not just a round slug with a cheap dye. There’s an element of deception here, as if the US Mint wants to invoke the symbol of sound money without its substance. The Mint calls this new coin the "Golden Dollar," when it is no more real gold than a child’s gold-foil-covered candy.


So what is this new coin made of? The US Mint brags in high-flown detail: "the alloy layers on each side of the core are manganese brass, a golden-colored material composed of 77% copper, 12% zinc, 7% manganese, and 4% nickel. Taking account of the copper core, the overall composition of the new Golden Dollar is 88.5% copper, 6.0% zinc, 3.5 % manganese, and 2.0% nickel."

In short, it’s a bunch of scrap metal, worth one dollar, not because of what it is but because of what it once was. And what a difference time makes. In the old days, the dollar was merely another name for a weight of silver or gold.


In the 19th century, it was about 1/20th of an ounce of gold. The dollar took a beating with World War I, the Depression, and the New Deal, and by 1934, the dollar was redefined as about 1/35th of an ounce. Finally, Nixon threw out the gold link altogether, unleashing hyperinflation by the late 1970s.

The upshot is that the dollar of 1913 is worth all of 6 cents today. This process of debasement—accomplished not through coin clipping but through executive fiat with central bank cooperation—is nothing but theft, spread out over decades and done in a way that bypasses the legislative process (in a way that taxation cannot).

In the ensuing years, the US government has tried a series of tricks to instill respect in its money, first with its silly "Bicentennial Quarter," then with its "Susan B. Anthony Dollar" (which fell flat), and now with its supposedly collectable quarters with state emblems on them (an appropriate symbol of what states have been reduced to: nice pictures on the government’s slugs).

The big concern at the US Mint is that the Sacajawea dollar will flop just like its Anthony predecessor. To insure against that, the Mint went to great lengths to make its design appeal to all the right interest groups. Hence, Sacajawea, the Shoshone Indian who accompanied Lewis and Clark, was chosen for the portrait for political reasons: she appeals to the new sensibility of recovering lost heroines who have been buried by the great white male conspiracy. The image on the coin was sculpted by a woman too.

In another time, you might have thought that a coin honoring the Lewis and Clark expedition would have, say, Lewis or Clark on it. But when you are truly inclusive and diverse you have to be exclusive (no white males) and homogenized (only current race and sex fashions, please). It’s a form of historical debasement that implies that Lewis and Clark were mere parasites on the glorious work of their Indian guide (and please don’t mention that her French husband, also on the expedition, rescued her from slavery and acted as her translator).

In the future of Marxist historiography, the story of everything will have to be told in terms that identifies real progress with the workers and peasants and never with the decision makers at the top. Only in this way can we be sure that no student will learn anything about anything. And it’s all to the good, imply our governing social therapists in Washington, that another dead white male (George Washington on the dollar bill) is being displaced by a woman of color.


But all this smarmy coinage politics actually works to discredit a great American tradition of featuring Indians on coins. The gold dollar struck in 1854 featured an Indian princess. It was followed by the Indian penny in 1859, minted just before the conquering Union armies began their cruel massacres of the Indians.

Then there were the early 20th-century $10, $5, and $2.50 gold coins with magnificent Indian chiefs on them. The most famous coin with an Indian theme is the buffalo nickel, still a highly valued item.


The implicit political message of these coins was to herald the storied independence and romance of Indians, a summing up of the best of American history and culture. The gold-colored dollar of today, however, is struck in a different spirit, a mere token of tokenism.

The best one can say about the coin is: thank goodness it doesn’t have a politician on it. In the case of FDR, Eisenhower, and Kennedy, they were canonized by the US Mint soon after death–as if to say that their legacy is beyond question. At the same, since the coin has no value apart from being "legal tender," the government can’t do anything that would cause people not to carry it around. The Richard Nixon dollar, or the George Bush dollar, just wouldn’t cut it.

The new Golden Dollar coin serves as a bitter reminder of what the government has done to our money. If you have any doubt about its merit, imagine how the chiefs of the Shoshone Indians would have reacted to pale faces trying to fob off scrap metal as real gold.

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Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute in Auburn, Alabama and editor of LewRockwell.com. Send him mail.

See the Austrian Study Guide's section on Money and Banking.


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