Kit-Kats for Nerds
P1. Children do not understand the value of money. On Halloween, they’ll trade a Kit-Kat for a box of Nerds, but they won’t take a dollar for that same box. Humans, on our most basic level, value trade of goods and services for something comparable in return. This system of trade has become bastardized, however, from exchange of goods to exchange of gold, to paper, and so on, until we don’t even know if what we’re exchanging even exists. For the most part, it doesn’t. It is simply numbers on a screen that tell us that we have the power to buy something that we need. So, is there really any value for children, or anyone, to understand? Does money have value anymore?
P2. In the western Pacific Ocean, as a piece of the Caroline Islands, lies the island of Yap. Its inhabitants are fairly unremarkable, save for how they do business. Their particularly scintillating form of currency consists of sometimes giant limestone discs that litter the island. Their diameter can measure a foot or twelve feet, each with varying sizes of holes in the middle. The larger the stone, the more value it holds. If it seems utterly impractical, that is because it is. The stones hardly ever actually change hands, as carrying them would result in braking said hands. So instead, everyone just agrees that a stone has a certain owner. Something large is purchased, and everyone is notified that the stone’s owner has changed. One family is incredibly rich, but has never seen their riches, as they rest at the bottom of the ocean. This may seem primitive, but in reality it is not too different from the American economy. (Friedman)
P3. In 1933, France demanded gold of the United States. Concerned about the value of the dollars they held, they wanted something more tangible in their possession to assure them of their fiscal security. However, instead of physically sending gold to the French, the Federal Reserve set aside gold for France. The actual gold did not travel anywhere, but everyone now knew that it was France’s gold. Sound familiar? (Friedman)
P4. This action of setting aside gold sent the country tumbling off of its fiscal cliff and into the Banking Crisis of 1933. (Friedman) The fiscal cliff is a relatively modern term, but can be applied in the situation of 1933. In recent history, the fiscal cliff referrs to the possible rise in taxes and cuts in spending that would take effect in 2013 due to a federal deficit reduction plan. (Calmes) If this one decision can send the economy into such chaos, then it must not be very stable. Any set of circumstances could manipulate the value of the dollar and its spending power, which begs the question, is the dollar really a stable form of currency? Is anything?
P5. In Brazil, they don’t have dollars. But that doesn’t mean that their currency is not easily manipulated and their economy not fragile. In 1990, inflation was so horrifically high that prices were increasing by 80% each month. (Joffe) Prices were changing constantly, and no federal intervention was able to fix the problem. That is, however, until 1992. That year, four economists put the Unit of Real Value into play, which was essentially currency with nothing to back it up. Prices stayed stable at a certain amount of URVs, wages were always in the same amount of URVs, everything was in URVs and inflation practically disappeared. Fake money solved real financial issues. But it wasn’t the money, it was the peoples’ faith in it. People saw that inflation had ceased and believed that the economy was fixed, and it was. (Glass)
P6. This goes to show how much sway public faith in currency has on the economy. Even if fake money is being used, people will see stable prices and believe in a stable economy. But who is to say what is fake and what is not? The legitimacy of money lies in what valuable commodity it represents. In the United States, that used to be gold, but in recent years the federal government has denied that gold has any bearing on the modern dollar. So the dollar is worth whatever it can buy. In one store, this may be a pack of gum. In another, it may be a child’s toy. People simply agree that something is worth one dollar, and everyone seems to accept it. But in modern times, physical money doesn’t even have to change hands in order for payment to be made.
P7. We live in a digital age, and that ushers in digital money. One very prominent form of digital money is Bitcoin, a completely digital “mine-able” currency that some businesses accept as payment. (Reeves) From the beginning, its creators have admitted to its lack of true worth, but customers mine away, spending dollars on bitcoins. At any given time, a bitcoin is worth a certain number of dollars, which is worth… what? At this point, in this age of the bastardization of payment, dollars may have much less value than we have been lead to believe.
P8. If anyone can make currency out of nothing, such is the case in Brazil and with Bitcoin, then what value does traditional currency have? That is, if currency is even used, and it is not just numbers on a computer screen that tell a person that they have currency. People are told to work for this number, people die because they don’t have this number, people base their entire lives around numbers on a screen, simply because everyone agrees that that number is the be-all-end-all of economics.
P9. In the end, the United States is not that different from the island of Yap, of 1990’s Brazil, or any economy that uses money with “no value”. Items have value, such as the Kit-Kat that is traded on Halloween, or the food exchanged for labor in the dawn of economics. Money used to be backed by valuable metals, but that is no longer the case. Virtual money is coming into power and even physical currency has no concrete backing. The only logical conclusion is that money as we know it today has no intrinsic value. We have all been tricked into believing in the URV, we all have giant stones that we agree someone owns. The economy that fuels millions of lives could disappear tomorrow and no one would have any less. In fact, a lack of a modern economy, at this point, sounds like a better idea. The world may be better off going back to trading corn for labor. At least you can eat corn. How am I going to make dinner out of Bitcoins?
Works Cited
Calmes, Jackie. “Demystifying the Fiscal Impasse That Is Vexing Washington.” The New York Times. The New York Times, 15 Nov. 2012. Web. 10 Sept. 2016.
Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 10 Sept. 2016.
Glass, Ira, Chana Joffe-Walt, Alex Blumberg, and Dave Kestenbaum. “423: The Invention of Money.” This American Life. Prod. Planet Money. 7 Jan. 2011. This American Life. Web. 11 Sept. 2016.
Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 2010. Web. 13 Sept. 2016.
Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. MarketWatch, 31 Jan. 2015. Web. 10 Sept. 2016.
Rowan Counterintuitive 
You’re a good writer, BellaDonna. You have a nice touch. You start strong and maintain an authoritative tone. You undercut that tone too often with cute touches, but they are easy to control.
As you know, you’ll receive quick grades in four grading criteria (ARMS). Grades can always be improved by revision. To understand your grades, you need to know your Grade Code. I will share them with you in class MON SEP 19. I’ve numbered your paragraphs for easy identification. Additional feedback is always available upon request.
ARGUMENT (Grade G)—Your introduction, P1, establishes a basic argument. We used to trade tangible goods and services, which have been replaced by increasingly intangible commodities. What remains though is the “power to buy something that we need.” When you ask, therefore, “is there really any value?,” you’ve already answered your own question. Sure, money has value: the power to buy what we need.
You make an original argument in P1, but in P2 and P3 you merely summarize the source material to point out what it points out: that physical possession of currency is not its essential property. Surely this was not always the case, and represents the second “bastardization” after the first, which was the very idea that goods could be represented by coins.
I very much appreciate your scholarship in P4. You’ve secured a valuable outside source. Naming the “fiscal cliff” concept is not enough to make its use or relevance clear here though. I can sense its value and application, but I couldn’t possibly paraphrase your argument to anyone else without studying the phenomena myself. You have work to do here.
There’s plenty to say about P5, but I’ve already been on your post for 30 minutes. In P6 you make a peculiar claim, that “the legitimacy of money lies in what valuable commodity it represents.” I think your essay means to describe a gradual shift from commodity (corn) to abstract (screen symbols). Somewhere in there, we stopped saying the currency issuer (government) had reserves of some inherently valuable stuff to “back” the currency. Your position on when these changes occurred shifts from paragraph to paragraph.
In P7, you say customers “mine away” as if they are creating their own Bitcoin (like minting their own dollars) instead of merely trading in Bitcoin or trading with Bitcoin.
RHETORIC (Grade G)—Your introduction, P1, makes good use of children’s faith in barter, distrust of money. But it needs follow-through. Children value the candy, not the dollar. You say “humans at our most basic” do too. So we’re like children. But we’ve lost our way somehow. We change work for screen symbols, or we trade Dollar symbols for Euro symbols as if they were valuable, like candy. We do so because “they have the power to buy.” Why don’t kids value the dollar? Do they not recognize it could buy Nerds from someone who has them?
Be VERY wary of Rhetorical Questions like those you employ at the end of P1, BellaDonna. These do more harm than good. FAR BETTER are your bold declaratives: “For the most part, it doesn’t” and “Money is numbers on a screen.” Your questions are teases and mostly irrelevant. You know the value of money. Your question is a different one: “Is that value secure? Is it based on something we can trust? Could my money suddenly become worthless?”
Two risks of rhetorical flourishes: 1) they distract readers from the essential argument; 2) they actually confuse readers. As an example: “Their particularly scintillating form of currency consists of sometimes giant limestone discs that litter the island.” Scintillating is completely distracting, sending us in search of some explanation. “Limestone discs litter the island” to anyone who hasn’t read Friedman means limestone discs are local phenomena, cheap as trash, not the repository of wealth. You know what you mean (they aren’t found where they belong), but readers don’t. Similarly, only your classmates could possibly understand how the rich family gains wealth from a rock at the bottom of the ocean. It’s not easy communicating the whole story in just a few words, but it must be done.
Admittedly, it’s very difficult to talk about abstracts like money and currency, but . . . you don’t carefully distinguish between US currency and dollar bills. The bills are the tangible objects. The currency is a measure of value relative to other currencies. We can trade in currencies without swapping bills, as when we buy Euros with dollars to travel to France.
MECHANICS (Grade G)—Use in-line citations, please. For example. Milton Friedman, in “The Island of Stone Money,” describes the unique currency of the Yap, inhabitants of the island of Yap, in the western Pacific.
Regarding commas in compound sentences: “Something large is purchased, and everyone is notified that the stone’s owner has changed.” This is correct because the clauses have two subjects: something and everyone. However: “One family is incredibly rich, but has never seen their riches, as they rest at the bottom of the ocean.” This sentence requires no commas at all. There’s only one subject for “is rich” and “has seen.” Also, the family IS rich makes the family singular, which is possible and fine. But “HAS never seen THEIR riches” makes the family once singular and once plural. You’ll have to choose. (One choice per sentence is best.)
Either: The family IS rich but HAS never seen ITS riches.
Or: The family ARE rich but HAVE never seen THEIR riches.
The United States might be just like the island of Yap, but that’s not what your sentence means to compare. Your sentence refers to “the United States” as an “economy that uses money.” You can compare the US to Yap, or compare the US economy to the economy of Yap.
Periods and commas ALWAYS ALWAYS ALWAYS ALWAYS ALWAYS go INSIDE THE QUOTATION MARK. As in: . . . any economy that uses money with “no value.”
SCHOLARSHIP (Grade F) —Once you replace your current citations with the inline version, I’ll be able to judge better how well you attribute ideas to other authors. The “fiscal cliff” source is a very good idea and will earn you credit once you incorporate it better into your argument.
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P7. We live in a digital age, and that ushers in digital money. One very prominent form of digital money is Bitcoin, a completely digital “mine-able” currency that some businesses accept as payment. (Reeves) From the beginning, its creators have admitted to its lack of true worth, as it is not backed up by anything physical, but customers still spend dollars on bitcoins. The linen and ink of a dollar is gone from their hands, and in return a number on a screen increases. Instead of trading a Kit-Kat for Nerds, they have traded it for an imaginary friend. A child believes wholeheartedly in the existence of her imaginary friend, and that makes it a part of her reality. The imaginary friend can provide entertainment and companionship, just as the Bitcoin can provide goods and services from certain businesses. But neither the child nor the Bitcoin customer have anything physical, and their fantasy only exists because they believe it does.
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This is ambitious and partially successful, Belladonna. I admire its boldness. You have to force several points to make your own, however. For example, the person who spends dollars for Bitcoin probably DOESN’T sacrifice any linen or ink: she buys digital Bitcoin for digital dollars. Impressive nonetheless.
THIS Fails For Grammar:
A child believes wholeheartedly in the existence of their imaginary friend, and that makes it a part of their reality.
Do you know why, and can you fix it?
Coded Grade: F but Fails For Grammar
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Is it because I’m using “they” with a singular noun? I’ll fix it.
A child believes wholeheartedly in the existence of her imaginary friend, and that makes it a part of her reality.
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Good work. Now, how about this one?:
Neither/nor works the same way either/or works.
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If the issue is with neither/nor than I don’t see what’s wrong… is it a different problem? And because I have two subjects isn’t “their” appropriate?
But neither the child nor the Bitcoin customer has anything physical, and their fantasies only exist because they believe they do.
Was it have/has?
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