Given Pennies or Lemons, Something Sweet Should be Pursued.

Late March 2012, and the Canadian government comes out with a budget with all the tricks of media manipulation well installed.

What's all this then? A few thoughts, in my usual "Too Many Words About…" format, on our political climate and the humble penny.

On one hand they were careful to schedule a particularly embarrassing hearing regarding alleged election-rigging to be simultaneous with the budget presentation, to ensure media outlets would mostly ignore it.  Then within the budget itself, they included a bit of media-candy - the elimination of the penny - with hopes that the popular appeal of currency-related stories could take some attention off other bad news stories hidden in the budget.

This post will take that gambit and explore the penny decision.  Happily, most media outlets have focussed on the meat of the budget rather than the $11million savings allegedly enabled by eliminating the diminutive penny.  Many reports use a jocular punctuation of the penny-story as a closing tidbit in their budget discussions.  But rather than argue keep it or lose it, I want to briefly explore a missed opportunity within the penny issue.

Pennies are arguably ineffective in our economy - their small value means that you cannot buy anything with a single or even a few pennies, as inflation over the decades has rendered them near valueless.  I'm not very opinionated about keeping or eliminating the coin. Commerce will work fine without them, and I'm not paranoid about getting ripped-off as a consumer due to the transition.

A little part of me likes the completeness of a currency system that includes a representation of the smallest unit. Unlike the physical world, we know the unit quanta of the scheme and having it available gives me some sort of assurance of a properly implemented system.

Another part of me likes the cultural element of the penny - how people react to it, or don't.  The little plastic "take a penny, leave a penny" dishes at cash registers embody some otherwise obsolete bit of trust among strangers that we don't see as much in the modern world.  There is also the fascination of a young kid finding a penny, or the trigger for stories of the value of a penny in our historic memory; a penny for your thoughts, penny matches, penny candy.  I like that those bits are current and in our pocket here and there.

But I can live without it, and the large can of collected pennies, and (as some visitors to my living spaces observed when I was single) my propensity to allow small change to pile up on random horizontal surfaces.

The missing opportunity is a technology-based argument.  We in Canada have some history of leadership in currency, both coinage and paper.   Our bank note printers (we had two of them here in Ottawa up until just recently) are known for printing currency for many countries around the world.   As well, our innovations in the bi-metal coin led the world. We pioneered and patented some facets of the two-metal coins that typically take the rung above the traditional range of coinage (two dollars/pounds/euros) with coins that emerged just over a decade back around the world.

The Canadian Mint created the Polar Bear 'toonie' coin in 1996. There were earlier bimetallic coins with the same differing outer ring and inner slug metals, but these were prone to coming apart.   The Canadian innovation was a special patented locking mechanism. An earlier French innovation in locking mechanisms was also important in the space.   In 1997 the Brits introduced the 2£ coin. The €1 and €2 coins emerged in 2002.

Hearing our Finance Minister say that making a penny costs the government a penny and a half was a challenge to my technology instincts as visceral as saying "you can't do that."  This makes me think that we're missing an opportunity here. 

Refined metals-based coinage seems a bit past its time, especially at the low-end of the currency spectrum.  What if the Canadian Mint invested some research dollars in plastic coinage - preferably recycled plastics?  Imagine if we developed a resilient coin technology from post-consumer plastic waste that allowed a penny to be made for 0.1 cents.  The security burden is low, as nobody would counterfeit thousands of pennies to make some spare cash.  The wear and loss burden is low as most of our modern pennies end up hoarded in jars anyway, so some loss due to damage or wear is no big deal.

Imagine, as well, the future of international currency challenges.  As inflation continues to devalue low-end-of-the-spectrum coinage, we could easily be the global go-to experts for budget-strapped governments looking for penny-range coin replacement.   We could put plastic Canadian coin technology into every pocket in the world.

Forget saving $11M from eliminating the penny, how about saving nearly the same amount from a cheaper penny, and driving hundreds of millions in international commerce as we solve the same problem for everyone else?

When there are escalating costs and "you-can't-do-thats" flying around,  there is often a choice between two approaches: run away from the problem or turn it into an opportunity.   It's too bad innovation and opportunity development aren't seen as an option for our government today.