[swores]

I believe that you two are not disagreeing in logic, just misunderstanding each others intended meanings.

When you said "a coin can never be worth less than the metal it contains", I think you meant "no matter what number is on the coin, its value is always equal to or greater than the value of the metal"; but dredmorbius misinterpreted your comment thinking you meant "the number on the coin must always be a higher value than the metal would be worth if it wasn't shaped like a coin".

AKA when carlosjobin wrote "be worth" you meant "value to sell", but dredmorbius thought you meant "value written on it".

I might be wrong, maybe it's me misunderstanding one or both of you - in which case please correct me - but I'm fairly sure you're both correctly thinking the same thing while incorrectly thinking the other person isn't.

[carlosjobim]

You have interpreted my thoughts completely correct.

[dredmorbius]

"Value" one of those horribly conflated terms of economics. For starters there are the relatively well-known conflicts between production cost value, use value, and exchange (market) value. The discussion here adds another element: the distinction of notional currency value vs. commodity value of underlying specie or substrate.

The absolute nature of carlosjobim's claim makes it fairly trivially falsifiable, however. Since nominal value is a value, if the face value of a coin is lower than its specie value, its use as currency meets his absurdity condition, "Of course a coin can never be worth less than the metal it contains...", but that remains its legal tender face value. As money, that is, an exchange token socially recognised as having a universal value, the coin is exchanged below its commodity value.

As a commodity, that is, metal (or other material) specie, the same item may have a different and higher value, but in this case it's not one which is universally accepted within a given market, but rather is dependent on the specific local market supply and demand of that specie. The coin-as-commodity is also subject to differential valuation based on characteristics --- assayed purity, weight, etc. --- which must be assessed on an individual basis for each coin.

In practice, where specie coin was used it virtually always traded at a premium above the commodity value, known by the term seiniorage, which I interpret as the trust value imbued by the currency issuer. My (unorthodox) view is that seigniorage exists in all monies, and is efectively the total basis for value of fiat systems such as paper or credit-based financial systems. The value of such currencies is a market vote on the trust in the issuing entity (and/or the lack of viable or accessible alternatives).

But again, coin-as-money has a value equal to its notional face value. That the face value may differ from its commodity value can of course occur. My argument is that this makes the exchange one of commodity trade rather than financial trade, and that ascribing commodity value to coin or face value is a misdirection.

Some years back looking into what money is, I realised that the names for virtually all currencies can be traced to either weight (pound, peso, dinar, penny, shekel, kopek, livre, baht, etc.) or division (dime, quarter, cent); or quality (dollar, crown, royal, franc, renminbi), sometimes appears as a signifier of value, e.g., the florin, yuan, or yen. I'd classify toponymic names (e.g., afghani) as referencing quality. There are the odd exception, notably Bolivar, the Venezuelan currency named for Simón Bolívar, though that's arguably a quality signifier.

[BenjiWiebe]

Nominal value is in name only, IMO. Which makes it not the value. I can sign my name on a piece of paper and say it's for sale for $5million (nominal value, right?) but it's value is nowhere near $5million, and noone will accidentally purchase it for $5million because they truly thought it was worth that.

nominal: existing or being something in name or form only (Merriam-Webster)

[dredmorbius]

Nominal value of legal tender is in fact legally defensible.

Mind that the problem is actually the inverse of what you describe. It's not that the nominal value is greater than the intrinsic specie value which causes problems with coinage, it's where the monetary value is less than the commodity value of specie, in which case "bad money drives out good". I've already discussed that in detail.

One point worth making explicit is that the receiver of such an under-priced coin would be more than happy to receive it, it's the spender who has to weigh the loss in commodity value against the nominal transactional value, should their counterparty only agree to acknowledge the latter. This brings up the further point that in an exchange, transaction price (whether nominal or commodity) depends on the alternatives available to the parties. A spender without alternatives on price or obtaining desired goods/services might well spend a higher-commodity-valued coin at its nominal value. Should they be aware of that difference, they might well not be happy about the fact, but they'd be forced into the trade by circumstance.