Stone Money – Prof2020

If someone had asked me several days ago what I thought money was, I would have regurgitated some textbook definition like “money is a form of currency to be exchanged for goods and/or services.” The reality is that most people, including myself, fail to consider the true logic and science behind the concept of currency.

The idea of trading things in exchange for other things has been around since the beginning of time because we’re simply a greedy species. How many times has someone asked you for something and one of your thoughts is “what am I getting out of this?” When America’s economy was first established, it was a small farming economy run by the colonies and over seen by Great Britain. Now, we have the nominally largest economy in the world. Most history books will tell you that our economy was built by hard-working Americans in hope of building a better life. In reality, our economy was built on faith. Banknotes were introduced in 1861 as a way to help finance the civil war. Basically a place holder for things of intrinsic value, they served as an investment in the U.S. Government to help support the war effort. These investments were made in good faith that the banknotes could be exchanged for their worth in something of real tangible value i.e. gold, silver, copper, etc.

Most countries have their own form of monetary system, some more exotic than others. Perhaps one of the most intriguing examples I’ve been introduced to is that of the island of Yap. The Yapese people trade coins of their own design. The coins vary in size, ranging from seven centimeters to nearly four meters in diameter. The larger of the bunch are often too heavy to move so they stay in one place for the long durations of time. Much like our economy, that of the Yapese people is built on faith. Rather than physically hand over their coins in exchange for the things they want, they simply transfer ownership. When a coin is too large to move, it remains stationary but everyone is made aware of who owns that coin. The coin itself has no value. Take the coin from the island of Yap and you’ve simply got a big rock. However, that’s where the faith of the Yapese comes into play. On the island, the great boulders of limestone are considered valuable because they are hard to come by and once cleaned and polished they’re quite beautiful. They hold value because people want them and that’s really all any financial system boils down to.

Modern currency was invented because it is far easier to regulate than just trading goods and services, which usually have immediate benefits but the value varies depending on the people involved. Common currency is also far more universal. If you can only exchange a certain item or service but no one wants it then you’re going to have a very difficult time generating any revenue. However, if the currency you use is more widely accepted you’ll be able to market to a wider audience.

My question is simply who gets to decide what has value and what doesn’t? The inhabitants of Yap found these large chunks of limestone and so admired and wanted after these rare pieces that it became their currency, regardless of what the rock itself can do for anyone. American dollar bills are representative of precious metals and other valuables but why are those the things we consider valuable? What good is a chunk of gold when I’m sick or hungry? It can’t help me unless I exchange it for something else. Now we must ask ourselves, “How different are we from the Yapese from anyone else?” This produces a “which came first” conversation. Do we want money because it’s valuable or is it valuable because we want it?

Frankly, I don’t know enough about how these systems are developed to form a firm opinion on how it’s all carried out. However, I do know I’ll have some new thoughts the next time I swipe my debit card or go fishing for spare dollar bills in the bottom of my bag.

Works Cited

Bellis, M. (n.d.). The History of Money. Retrieved September 13, 2016, from http://inventors.about.com/od/mstartinventions/a/money.htm