The penny question has agitated many of Dr. Boli’s acquaintances. On the one hand, some thought the decision to stop minting pennies was long overdue, since it cost much more than a penny to make a penny. On the other hand, some thought it was the Beginning of the End. The latter have been more agitated than the former, and thus more vocal.
Now, Dr. Boli does not follow social media, and he has been meaning to catch up on the news but still seems to be stuck somewhere about the Eisenhower administration; so for all he knows everything he is about to say has been said over and over ad infinitum, and you might as well just go look at pictures of flowers.
Dr. Boli perfectly understands the people who feel cheated by the disappearance of pennies. Your bill comes to $19.82. You hand the cashier a twenty-dollar bill. You get a dime and a nickel back. Where are my three cents? your well-trained capitalist mind is screaming.
But let us take a long view of the question and see where we stand in history, and then perhaps Dr. Boli’s solution to the problem will seem obvious.
American currency is decimal, ascending by powers of ten:
mill ($0.001)
cent ($0.01)
dime ($0.1)
dollar ($1)
The “eagle,” a ten-dollar gold coin, is often mentioned as one of the original basic units, though the Coinage Act of 1792 specified “that the money of account of the United States shall be expressed in dollars or units, dismes or tenths, cents or hundredths, and milles or thousandths.”
You will note the presence of “mills” in the list—a unit still in use in property taxes and gasoline prices, but one for which no coin was ever minted, on the reasonable grounds that it would be silly. Most prices have always been expressed in cents as the lowest unit; in other words, with two digits after the decimal point, not three.
The value of money went up and down through the nineteenth century before settling on a remarkably steady downward course after the First World War, and of course the things we buy now are greatly different from the things we bought in 1792; so it is a little hard to make exact comparisons. But it would be very reasonable to say that a half-penny, the lowest denomination authorized in 1792, was worth more then than a dime is now.
And that brings us to our obvious and straightforward answer to the penny problem, which—as we hinted earlier—is mostly a problem of psychology. The difference between what we paid and what we owed is eighteen cents, and we get only fifteen cents in change. We’re being cheated!
Do you see where we went wrong? Our error was not in eliminating pennies. It was in keeping nickels.
We have already learned to do without the third place after the decimal point. Simply cut off the second, and the psychological difficulty disappears. Remember that a dime now is worth less than the smallest possible denomination when our currency was established.
As long as we have nickels, we need that second digit after the decimal point. As long as it exists, sales taxes and suchlike percentage calculations will cause that digit to mock us with numbers that are not multiples of five.
But take that digit away, and the nickels with it, and the mockery goes with them. Once again we have a coinage that perfectly matches the bills we pay with it. Instead of $19.82, the price you owe, if it is more than $19.8, is $19.9. Your change is one dime.
Doubtless millions would rise to defend the nickel instinctively, unable to face a future in which the face of Thomas Jefferson would not wink at them from their change purses. But if we can weather the penny protests, the nickel protests should be simple. Tell your congressional representative that we need to shave one decimal place off the usual expression of monetary value. Explain the mathematical principles involved if your representative is a bit fuzzy on them. And then relax in the knowledge that you have done your duty as an informed citizen. You may even take credit for the idea if you like; Dr. Boli has nothing to gain from it, and offers it only as a public service.