P1. In the little island of Yap there were the wealthy that would travel 400 miles to get these big limestone discs, also known as fei, to exchange as currency. In order to move these big stones there is a hole carved in the middle of it, so a tree can fit through it and roll the fei around. Despite the hole in the stones, the stones for the most part didn’t move around from one person to another. Instead they stay put, and the people of Yap just know who it belongs too. They will usually trade the fei for big purchases according to NPR’s Broadcast of “The Story of the Stone Money”. I thought the concept of the Yap’s money was dumb. I didn’t understand how they believed that a big unevenly shaped stone made them rich even if it wasn’t even in their possession. That to me was the most illogical thing ever. As I started listening to NPR’s Broadcast of “The Story of the Stone Money” and reading Milton Friedman’s “Island of Stone Money” I began to realize our economy and our visual of money is not too far off from those that live in Yap. Both, the Yap and us Americans, believe we can be wealthy and gain wealth by not actually physically moving anything.
P2. In Milton Friedman’s story, “Island of Stone Money” Friedman explains how the French didn’t think the USA would stick to their gold standard of $20.67 an ounce. Therefore, according to Friedman, they asked the NY Federal Reserve to convert their dollar assets into gold, and set it aside for them instead of shipping it overseas. The Federal Reserve then put aside gold for the french. They separated the gold, and put it in drawers so it wasn’t touched. This way everyone knew that belonged to them. After reading that I realized money is just knowing what you have, it is nothing physical. For example, you do not need the physical cash in your hand to determine your wealth. In Yap they determined their wealth by others knowing how many fei they owned, and not much different us in the USA determine how wealthy we are by digital numbers raising in our accounts.
P3. After reading, “Island of Stone Money” I began to questions why do so many people have the faith in others to determine their own wealth. For example, how is it that I deposit money into my bank account, and a digital number, a machine gives me, determines my wealth. How does money from my account get taken out, and put into the car companies account. But nothing physically is exchanged? That flimsy green piece of linen is barely used anymore, it is all about the plastic card with a chip in it. How is it that France has the faith in us to put aside gold for them that they bought, but they never physically saw? How is it that there is a fei at the bottom of the ocean near Yap that no one has seen for years, but yet it is still being used as if it was physically there.
P4. I continued my research on how people put their faith into other with their money, and I came across an article by NPR’s Broadcast called “How Fake Money Saved Brazil”. Just twenty years ago inflation in Brazil reached 80% a month according to NPR. Brazil’s inflation began when Brazil’s government printed money in order to build Brasilia, Brazil’s capital. They created a new currency and it improved their economy rapidly! People would still have cruceros, but everything was listed in a URV, Unite of Real Value. One URV would equal 7 cruceros, and the next week one URV would equal 14 cruceros. According to NPR broadcast this idea was created so people would stop thinking prices would go up. After a few months the prices began to equal out, and that’s when they decided the URV was the new real currency. After this change 20,000 people got out of poverty!
P5. After reading these articles I came to think, what actually is money? To the people in Yap money is a big rigid limestone that doesn’t have to be in their possession. To us money is fake, it isn’t that green rectangle linen with pictures on it. It is numbers we see in our accounts, and we use plastic cards to make purchases. To Brazilians money was virtual, it didn’t exist it was just a unit of measurement to control their inflation. Throughout the years money has developed many different values. Now a days it is hard to survive without money, even though we might not even physically see it. I believe money is what makes the world go around. Even if no one actually has a definition of what money is. Money all around the world is physically different, but the actual use of it is all the same. What connects everyone’s money value to all others are their concept of money. The concept of money is just the trust you have in each other. Whether you live in the US and put your trust in a bank. Or whether you live in Yap, and put your trust into other people knowing what is yours, or even trusting 4 men you have never met before to create a new currency and help inflation. Money is different everywhere, it is the trust that makes it the same.
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. 9 Sept. 2017. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil>.
“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.