We all know that, on some basic level, money is purely symbolic. It only works because everyone collectively agrees to participate in the fantasy that a dollar bill is worth a dollar, whatever that is. Moreover, most of our money these days is purely electronic, represented by ones and zeros and real only in the most abstract sense possible.
Christopher Ingraham at the Washington Post offered another way of thinking about money as a social construction: how much it costs to make it. None of our coins are actually worth what they cost, and pennies and nickels are worth quite a bit less.
The excess cost of producing pennies and nickels means a budget deficit for the Treasury. In 2013, producing the coins cost the government $105 million dollars above and beyond the coins’ value.
Interestingly, moves to eliminate pennies have been successfully opposed by the zinc industry for years, illustrating another sociological phenomenon: the power of corporations to shape government decisions.
Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.
Comments 11
Sheila Johnston — April 24, 2014
Here in Canada we got rid of the penny, through an act of Parliament last year. Cashiers either round up or down from the 5 cent mark. There is no difference in electronic transactions. I don't miss them at all.
Colin — April 25, 2014
You also have to take into account the lifespan of coins and banknotes, so they have to be produced not only to increase the supply of cash, but also to replace existing cash. Metal coins last for decades, but notes wear out quite quickly, so it would save money in the long run to switch from dollar bills to dollar coins. I gather that the cotton industry has played a role in promoting the dollar bill over the dollar coin for this reason. (I suspect the US dollar bill is currently the least valuable banknote in widespread circulation in a first-world country - typically, the lowest-value banknote in a first-world country nowadays is worth somewhere in the range $3-$10.)
Bill R — April 25, 2014
I throw pennies in the trash or leave them on the counter. Foolish little things to carry around with you...
Fuck yo couch — February 1, 2015
Thats why canada did away with pennies, we round up/down and use Plastic Bills you CANNOT tear, no matter how strong you are.
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