Stone Money-nyctime7

The idea that money has any value, is a myth.  Money is simply the physical representation of a person’s wealth. No matter the object used as currency, it will always be a placeholder for something imaginary. It’s important to remember that there’s a difference between value and worth. As Americans, we use dollar bills as our form of money. The literal dollar bill is nothing but a piece of paper, yet we measure our worth using it. The idea that we are either rich or poor based on how many pieces of paper we have, is quite odd on the surface, but it works. Our idea of money is similar to that of the people of Yap, as well as Brazil. Money is given power by people, and can only exist when a person believes it has value.

The exchange of goods from person to person has existed from the beginning of time. The only thing that has changed, is the object various people use as currency. On the island of Yap, large stones are used as money. A person in possession of a stone, would hand over their stone, in exchange for other goods. In many cases, these stones were too large to actually be exchanged, and transactions were essentially made on “good faith”. An example of this is a family who lost their stone before ever receiving it. The people of Yap acted as if the stone was never lost, and treated the family accordingly. This practice was accepted as a logical means of trade for the people of Yap, regardless of physical possession of stone. To the modern person, the people of Yap, probably seem like fools. I myself even questioned their logic, until I compared their stones to our bills. Our methods of trading are very similar to those of the Yap. We trade pieces of paper for other goods, given that another person believes our paper is worth the exchange. With the use of banks and credit cards, we don’t necessarily see the money we give or receive, but we accept it as gospel. Our monetary system may be more modernized, but at its core, is just as “crazy” as trading stones for actual goods.

In the 1990’s, Brazil faced one of their worst economic problems, inflation. The president at the time printed an excess of money, which resulted in the downfall of the cruzeiro. In the blink of an eye, the price of an item would change. Stores changed prices daily, sometimes hourly, leading people to believe nothing could be done to control inflation. This trend continued, until four men introduced a fake currency. Unlike the cruzeiro, this fake currency, URV’s, would stay stable. The only thing that changed was how many cruzeiros a single URV was worth. When people noticed the stability of URV’s, Brazil’s economy also stabilized. Like the people of Yap, Brazilians had to believe in their currency for it to flourish. The price in URV’s gave people the idea that priced had stopped steadily rising, when really they rose and fell like any other currency.

Prior to my research, I thought my $1 was actually worth $1. In reality, that $1 could be worth more or less than the value printed on the bill. I never realized how we operate on a system of good faith, especially in our modern lives. If my bank failed tomorrow, I have no physical item to prove that I’m worth something. We’re simply trading pieces of paper, given value by the government, as representations of worth. Don’t get me wrong, this system is needed in order to make transactions, but if we as a society stopped believing in the dollar, are we really worth anything?

Works Cited

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 10 Sept. 2016.

http://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money

http://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil

http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money