Stone Money—theshocker69

Talking Money

P1. Money is what makes the world go ’round. We all recognize the importance of money in our capitalist society. After all, we spend over 20 years of our lives receiving an education for what? To earn money.

P2. In 1991, anthropologist Milton Friedman visited an island over 8,000 miles away in the subregion of Micronesia called Yap.  The official currency of the island is fei. The currency is made up of large sandstone donuts ranging from one foot in diameter to twelve feet. These “coins” are typically taller than a man, and weigh more than a car. As a result of the size of these stones, you are not required to obtain the coins in order to possess them. After a transaction, the new owner of the stone is recognized which disposed the need to carry it around and hold it. As a result of this, there are situations in which rich families of Yap have never even seen their wealth.

P3. Years ago, relatives of this family were hunting for fei. After the discovery of a massive fei stone, the family captured it and tied it to their boat in an attempt to bring the money home. Disastrously, there was a violent storm the night of their voyage back to the village. As a result, the family had no other choice but to save their lives and drop the fei overboard. Once back at the village, they had to testify for their money that was dropped. They explained its massive size, the wealth it held, and declared that it was lost through no fault of their own. The family was then allowed to keep the stone as their own with absolutely no loss of value. Now, it is accepted in their village that there is a stone in the ocean that has never been seen yet holds massive wealth.

P4. Does the idea of not actually having your money on-hand sounds trivial? Well the Fei is very similar to the American currency system.

P5. Before 1933, American currency was backed by gold. This meant that the trade of dollar bills were promises of gold which was held in banks. After 1933, the decision was made that we may no longer trade money for gold at our banks. The American dollar was officially unbacked.

P6. As of today, our money is still unbacked and the only true value of the dollar is what one can buy with that dollar. Further, is now optionally paperless. The money that is held in the bank is utilized to give loans. The money that resides in the bank is essentially fictional numbers with no actual cost, the actual money may not even be in the client’s account at the moment. At this point in our society, we are trading virtually useless pieces of paper for goods and services. The only reason these pieces of paper have value is because we want it to, we believe it has wealth.

P7. Growing up, I never understood money. However, after my new education on the topic, I recognize that the fictional value we place on money is a necessity. Without money, contrary to popular belief, the world would be chaos. What is the incentive provide services or create and trade goods? We would not have teachers, doctors, lawyers, or even public officials. The blind faith that we hold in our currency, although dangerous, is currently essential.

Works Cited

The Planet Money Team. “The Invention of Money.” Audio blog post. This American Life, 7          Jan. 2011. Web. 23 Oct. 2016.