Glory be, the government has been outwitted again!
The US Mint has suspended its scheduled production of the Sacagawea dollar, and now says it will make it only for special collections. It has completely given up the idea that it would ever enter circulation and become a normal part of American monetary life. Thus does Sacagawea go the way of Susan B. Anthony and the Eisenhower dollar.
The fiasco began five years ago when Congress first authorized the coin. It took 18 months of meetings, phonecalls, faxes, and emails just to decide on a design. When the thing was finally released, the US Treasury whipped up a hugely overblown media frenzy.
We were told ten thousand times of the Indian woman who was supposedly the real hero behind the Lewis and Clark expedition (take that, white men!). Public schools and public-service ads became full-time "gold-dollar" propaganda mills. The government attached the name "gold" to the coin, while cheekily obscuring the difference between the color and the metal (in fact, the coin was a tin can shaped like a coin).
Instead of being released in banks, they were put inside cereal boxes and given away at Wal-Mart stores. You can just see the bureaucrats thinking: "How can we get those stupid rubes in the heartland to use this coin? Hey, let's get that store called Wal-Mart involved!"
That was only the beginning of the nonsense. The US Mint's slogan was the hilarious: "It's Money. So Use It."
You have to be suspicious of any money about which the government keeps having to say: It's money! It's money! In the same way, the government says of its wars: we are protecting you! And of its social security system: it's a savings program!
Somehow these guys never seem to learn that Americans are not ordered around so easily. Those behind the coin believed they had thought of everything and learned from their past mistakes. But they missed the largest lesson of all, one discerned by Mises in his 1912 book, The Theory of Money and Credit: money is the ultimate market institution and can never be imposed on people but rather must be voluntarily chosen and used. No power on earth can make something money that is not.
Part of the advantage (to the government) of this coin was supposed to be its longer life in circulation, 30 years as compared to 18 months for paper. What they didn't say is what consumers realized almost immediately. The Sacagawea looks gold only before it has been touched by human hands. Flip it around for a minute and the tarnishing process begins. After prolonged handling, it takes on the color of a rusted brake drum.
As with its predecessors, consumers never took a liking to it. All the browbeating and propaganda couldn't persuade people to use these coins as money. For two years, the government cranked them out, making far more than they anticipated. When it became obvious, within months, that the coin was failing as a currency, they cranked up production and said they were meeting the huge demand. In fact, any coins actually held by the public ended up in jars in their houses.
More than a year ago, our own publisher, Burt Blumert, saw that the coin was a failure. In an interview with Mises.org, he pointed out that the coins were selling at a premium on the government's own website. The premium demonstrated that they had already given up and started treating it as a collectible. "That's the one way the bureaucrats have dreamed up to get rid of the millions of these Sacagaweas they have sitting around."
Then there was the insufferable role of Hillary Rodham in introducing the coin during a ceremony that must have been the longest parade of PC babble in history. We were even treated to a long performance of Iroquois singing ("T'twanuhela:fuhe' yaku:kwe, T'twanuhela:fuhe' yaku:kwe") even though Sacagawea herself was Shoshone. Hillary even went so far as to say that the Sacagawea coin "set the tone and the very spirit of this new century."
If so, it is a spirit of defiance. So let us hope she is right! Robert Rubin, introducing the coin, said the image was a way for "government to talk to its people and for people to talk among themselves." Well, he left out one thing: people also have means of talking back to the government and one way is to say phooey to the feds.
Poor Sacagawea, who had a tough life and by all accounts did in fact play an important role. Indians have been honored on American coins for our entire history — because they represent independence and liberty and the will to fight — exactly the opposite of the message conveyed by Hillary and Rubin.
The significance of the Sacagawea failure goes beyond the inability of the incompetent US Treasury to replace paper with base metal. The event serves as a perfect proxy for the failure of central planning itself. Even with all its monopolies, guns, money, and propagandists, government still cannot force people to do things in their economic lives that they do not want to do.
The Sacagawea and the Soviet Union failed for the same reason.
May 15, 2002
Copyright © 2002 Mises Institute