The Liberty Dollar: Not a Crime

I first read about the case for the Liberty Dollar at Cap’n Arbyte’s Blog. For those unfamiliar, the Liberty Dollar is specie currency, privately minted. And true to form (and the bumper sticker which bears the same message), the Government hates competition. You can read the U.S. Mint press release, here.

The story has caught the attention of the Washington post, which reports that, “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.”

The same sentiment is echoed in the press release issued by the Mint: “However, despite their misleading appearance, NORFED “Liberty Dollar” medallions are not genuine United States Mint coins, and they are not legal tender.”

…Which means: nobody must accept the Liberty Dollar in exchange for anything. That is the defining characteristic of fiat money — that everyone, everywhere, must accept greenbacks. But this does not mean that I can’t offer to pay my obligations in doughnuts.

And any merchant is free to accept my offer of doughnuts, maybe he’s really hungry, or has a weird fetish or something. Who knows? It doesn’t matter. What he cannot do, is tell me that I owe him $3,000 – and my debt must be paid in such-and-such a manner. He is required by law to accept my Treasury Notes in repayment of the debt. But he is not, nor am I, precluded by law from reconciling a dollar-denominated debt in another, mutually agreed upon manner.

Ms Bailey says that “Merchants and banks are confronted by confused customers demanding they accept Liberty Dollars. These are not legal coin.” (The press release – and a subsequent addendum – do not refer to the Liberty Dollars as ‘coin,’ but rather as ‘medallions’)

There is a differnce between a coin-like round, shiny thing which is legal to produce and exchange, and the statutory definition of “legal tender.” This is not a crime. This is plain and simple government failure. It is the government’s responsibility to make sure that the definition of legal tender is understood by its constituency – and concomitantly, that the people recognize that worthless government paper is the only currency that must be accepted. It is not NORFED’s fault that the US Mint has failed to communicate these supremely important points of law to the people.