Liberty Dollars were coined by von NotHaus and an Evansville, Ind.-based group called Norfed, which stands for (sort of) the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code. In the late 1990s, the group began hawking its money as a hedge against inflation, and as a way to compete with the Fed. Von NotHaus makes the pitch online, using a raft of statistics and graphs that he says show the greenback is well nigh worthless.
I’ve read about them before, and understand the basic idea that the greenback is worthless. It’s a crock for reasons beyond what I’m interested in talking about here, so I’m content to accept that those who use Liberty Dollars are kooky. If merchants want to accept them as payment, that’s between the merchant and the customer. If a merchant refuses to accept them, that’s also between the merchant and the customer. Either way, the basis of commerce is something of value for something of value. Trade is good, and I’m not judge of what someone else considers good.
Our government’s position is that Liberty Dollars are Bad™. I think it’s over-reacting, considering no legitimate crime has been committed. I’m just surprised that the U.S. Mint didn’t invoke the children who might try to buy bubble gum with Liberty Dollars:
The U.S. Mint acted after federal prosecutors around the country began forwarding inquiries about the coins. “We don’t take these consumer alerts lightly,” said spokeswoman Becky Bailey. “Merchants and banks are confronted by confused customers demanding they accept Liberty Dollars. These are not legal coin.”
As I said, merchants and banks are free and capable to say no when confronted with Liberty Dollars. If they, or individuals, choose to accept them, that says more about our need for economics education than any indication of criminal activity. Prosecuting those who create and/or use Liberty Dollars is nothing more than a meddlesome trade restraint.
Post Script: Government shouldn’t provide that education, since education isn’t a legitimate function. But since it is our education provider, couldn’t we make a case that government is responsible for this? It won’t teach economics to everyone it educates, but it expects everyone to behave correctly. That’s a system with failure as the logical outcome.
More thoughts at defcon:blog