Stone Money Rewrite—yankeeskid6

Invisible Currency

Money, the extremely complex foundation of our economy. I always wondered growing up how did a piece of paper with some inscriptions and fancy images become the social fabric of our world? A child could put a U.S dollar bill side by side to monopoly money and can understand that one is worth something and the other isn’t, even though monopoly money-like “real” money- is simply paper from our trees. Therefore, we must question, why is money valuable? Tangible property is any property that a human can touch. Therefore, why is it disputed in some legal systems that money is intangible or tangible property? Money is so complex because though the dollar may be tangible its worth isn’t, its nothing more than an idea, a concept and a troublesome one at that. In early history we traded among each other valuables that everyone needed. We valued precious and rare metals or jewels such as diamond, gold and silver. We valued goods as currency and only cared about items which every colony needed. If a man had a pig but needed a cow he would search for a man that needed a pig and had a cow. This exchange of goods was logical and never involved a paper bill with a complex system of valuing that bill. Money in its self has no real value to it, it isn’t rare and its not hard to get to. We the people make money valuable, we make the value “real”; but should we?

When I came across the article by Milton Friedman titled “The Island of Stone Money,” I was intrigued. The island of Yap is extremely underdeveloped lacking most valuable metals and gems.  However, when they discovered what seemed to them a precious rock called Limestone on a neighboring island they began using it as their form of “currency.” Their system of exchange comes off as odd to most Americans; it shouldn’t. According to Friedman these men and women could trade these large pieces of stone for other valuables they needed or important services such as the retrieval of a fallen soldier. Here was the catch; technically you never had to physically have the rock in your possession. The craziest part that Friedman further explained was a Yap natives didn’t even have to see the rock . Reading this made a light bulb shine bright inside my head. I soon realized that this ridiculous form of “currency” is a lot like civilized countries in the world. The point is not the physical aspect of money that gives it value, its simply the idea of money and what it represents that makes it valuable.

Friedman further demonstrated the loose lines of ownership with the example of the Frenches possession of their gold, however they didn’t physically possess any gold, a matter of fact their gold was on U.S territory in a drawer titled “France.”  This further explains the concept of that which is called money. Like the Yeps the French never moved their valuables but it was understood that it was theirs. I believe this system is just as flawed as that of the Yeps. Precious gold sitting in a drawer holds no true value or use, why should the French be granted hypothetical millions for it? Some outstanding examples of made-up money is Bitcoin and URV. When we use bitcoin we are essentially transferring images and codes over to our bank through a network of computer systems. In no way, shape or form is this real money. But, we except it as real money with real value! How is something intangible in an exchange of goods essentially, valuable? We aren’t physically handing anything over to the bank but they still accept it.  Presented in the article “How Fake Money Saved Brazil” by Chana Joffe-walt is the system called URV.  URV is essentially made up currency. Chana Joffe-walt explains Brazil’s state of high inflation rate which in turn practically made the price of items go up either everyday or week. The country was in turmoil. Two finance men came up with the idea of replacing cruzeiro (Brazil currency) with a virtually “fake” currency and they called it URV. The worst part is this idea was accepted, used and succeeded. This new currency had 0 worth but worked as a point system to drop the price of goods. Still, how was this possible and did Brazil really even change much? If all money is essentially worthless Brazil basically replaced fake money with more fake money but a better executed plan. These two examples prove my point that money just seems to be an idea. It seems crazy to me that much of peoples’ happiness and status in this world is based solely of off an idea with no true value.

Recessions or economic depressions effect everyone. The way the economy is set up values this idea of money over true goods and resources. After reading these articles my perception on money has changed tremendously. It raised the question, is this the right way to go about it? Was the old way of trading goods and food and resources more useful? This isn’t just for me to decide.  Although, it is sad to see people lose their happiness and parts of their lives struggling over the obtainment of technically a purely intangible idea.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 30 Jan. 2015. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015. <https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html&gt;.

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.