Watching our money float away.

• Author: Lipsky, Seth
• Position: Business & Finance

CONSIDER ONE of the most important measures of property, the kilogram. It is a measure of mass or, for nonscientific purposes, weight. A global scramble is under way to define this most basic unit after it was discovered that the standard kilogram--a cylinder of platinum and iridium that is maintained by the International Bureau of Weights and Measures--has been losing mass. You may think this is impossible. Of all the elements, iridium is the most resistant to corrosion, and the cylinder is kept in a facility at Sevres, France, where it is under three glass domes accessible by three separate keys. The cylinder itself is more than 130 years old and is what The New York Times calls the "only remaining international standard in the metric system that is still a man-made object." The new urgency to redefine the kilogram comes from the tact that its changing mass "defeats," as the Times put it, "its only purpose: constancy."

The question I invite you to consider is, what would happen if we just let the kilogram float? This is a question that was posed in an editorial in the New York Sun. After all, the editorial pointed out, we let the dollar float. The creation of dollars--and the status of the dollar as legal tender-is a matter of fiat. Its value is adjusted by the mandarins at the Federal Reserve, depending on variables they only sometimes share with the test of the world. This would have floored the Framers of our Constitution, who granted Congress the power to coin money and regulate its value in the same sentence in which they gave it the power to fix the standard of weights and measures--like, say, the aforementioned kilogram.

Now, the record is clear in respect to how America's Founders viewed money. Many of them went into the Second U.S. Congress, where they established the value of the dollar at 371 1/4 grains of pure silver. The law through which they did that, the Coinage Act of 1792, noted that the amount of silver they were regulating for the dollar was the same as in a coin then in widespread use, known as the Spanish milled dollar. The law said a dollar also could be the free-market equivalent in gold. The Founders did not expect the value of the dollar to be changed any more than the persons who locked away that kilogram of platinum and iridium expected the cylinder to start losing mass. In fact, in this same 1792 law, they established the death penalty for debasing the dollar.

Members of the Federal Reserve Board do not worry about how many grains of silver or gold am behind the dollar. They could not care less-and this is the most worrisome threat to property rights today. When the value of a dollar plunges at a dizzying rate--at one point in recent months it collapsed to less than 1/1,400th of an ounce of gold--Federal Reserve Chairman Ben Bernanke goes up to Capitol Hill and declares merely that he is "puzzled." There is no "new urgency" to redefine the dollar for him. The fact is that we have long since ceased to define the dollar--and it can float not only against other currencies, but even against 371 1/4 grains of pure silver.

So, the New York Sun asked, why not float the kilogram? After all, when you go into the grocery store to buy a pound of hamburger, why should you worry about how much hamburger you get--so long as it is a pound's worth? A pound is supposed to be .45359237 of a kilogram but, if Congress can permit Bernanke to use his judgment in deciding...