The monopoly on money

SATURDAY, FEBRUARY 19, 2011

The monopoly on money

The MOTH (Man of the House) has a peculiar habit of picking up the odd-bod things that slide by the rest of us. By that I mean he actually decides to grab the bod out of the air and do something about it. His latest escapade was in the dairy this afternoon when he had to buy a tub of margarine. He took it up to the counter, paid over $4 in coins and then told the poor dairy worker that he expected his one cent change.

“We can’t do that sir,” said the hapless worker.

“Why not?” said the MOTH. “If you are advertising something at $3.99, then I expect to get the change.” He said this knowing full well that our currency no longer supports the one, two and five cents it used to.

His reasoning was it is false advertising – and he is quite correct. No matter that even the supermarket giants do it, the bottom line is technically, it is not legal to use one, two and five cents as legal tender.

They may not, as of 1 November 2005, accept it from you. But you have to accept them charging you for it and if you cannot come up with the correct change – which of course you can’t; it’s not legal tender - then that is fine, they will charge you one cent more to round it up. How does this happen? It’s not legal tender, therefore they can’t charge you – and by rounding it up, they are falsely advertising the price of the goods you are buying.

This peculiar little loophole led me to wonder just how strong, then, are laws regarding legal tender if this one can be so blatantly broken even six years after it became fact.

If, for example, a group of us Home Executives of The Round Dining Table got together and decided to raid the kids collective Monopoly banks and start charging each other for half a dozen eggs from Susie’s backyard, or three kilos of plums from Helen’s front garden, or for a baby’s matinee jacket Melanie knitted, what’s the problem with this? And if enough of us did this, then how exactly, could say, the Inland Revenue have a problem with the accounting side of things? We could, using this loophole, pay GST if demanded – but in Monopoly money, because that’s the tender we are using.

I mean, in the past, paper money was representative of how much gold bullion one had in one’s respective Fort Knox. These days, with the removal a century ago of the Gold Standard, we’ve pretty much had carte blanche to print money. Yes, there are times when the overprinting of it didn’t work – which was why towards the end of World War 2, the cost of a pencil in Germany could be six million marks. But what’s a few million here and there between friends?

The thing that makes this whole thing mindboggling in its being as loose as Aunty Daisy’s drawers is that most people don’t even realise that electronic money, (EM) or digital cash (DC) which is what you use to pay things online for example is NOT legal tender either according to the NZ Law Commission’s 2001 report on electronic billing and E-payments.

So we are being billed – and paying for – something that does not even actually exist as legal tender. That’s actually quite scary, because what that means is that you could pay online for a bill, the payee actually can turn around and tell you they don’t want to accept that as it’s not real tender and theoretically, you could be charged again. You’d still be out of pocket for the ‘imaginery’ amount you paid however.

It’s past time that the whole system was looked at properly; I mean, it has been a whole decade since the above report was published – yet there have been no changes, other than those people alert enough to safeguard themselves by ensuring a clause that all payments made or accepted electronically shall be deemed to be legal tender.

Otherwise, there really is nothing whatsoever wrong with us HETRDTers becoming bankers – and having the Monopoly on it.