Money is a Concept
Money is a concept. It’s a concept created by human beings in order to simplify trade and distribute power. Whether is be with paper, plastic, stones or some made up currency, the thought of money was utilized to make it easier to buy things and to produce a name for someone in a town where they are know for their financial standing. With all that being said it’s time that people look at money, not as how much they personally have in the bank, but as something that exists but doesn’t, something that’s important but isn’t, and something that was made on the grounds of trade, nothing more, nothing less.
In order to understand that money is nothing more than an organizational tactic for trade, you must understand what money is for the people of the Yap islands. The island of Yap is a very small island located in the Pacific Ocean. This tiny island wouldn’t even be something to talk about if it wasn’t for their currency and how they perceive the values of it. On this island people use huge stoned carved into circles to represent money. The family with the biggest and nicest stone was to be consider the most wealthy. These stones where carved on a certain island within this island chain and brought to the island of Yaps once they were finished. One family ordered a stone so beautiful and big that it would hold their financial standing up among everyone else. On the boat ride back, with the giant stone aboard, the working men claimed that the stone fell out of the boat and sank to the bottom of the ocean floor. Coming back to shore empty handed would have made most people extremely upset that their prize possession now a wonderful addition to the coral reef, but not for the people on this island. The family didn’t fret at all because they still, in a way, owned the stone and everyone also knew that. The philosophy that these people have regarding their currency is that if the town knows you have it, then it’s yours. So no matter whether or not the stone is present for trade or becoming a wonderful home for the fishes, the value of the stone still stands and it stands for the family that is know for having it. That is a very interesting take on money. These people use stone circles, compared to the dollar bills in our wallets, but don’t even need to have it on them to be considered “good for it”. Their currency is based upon trust and community, the actual thing that “holds value” doesn’t even need to be present to stand the value. That’s pretty incredible and proves that money is a concept, especially to these people.
Over in Brazil, in the 1980’s, their economy was facing a major downfall. This problem had been brewing since the 1950’s and it stemmed from overproduction of money. Brazil was looking at an 80% inflation rate per month. Meaning that if something cause $1 this month, it would cost $2 the next month. In order to fix this problem the president pulled in a couple of guys straight out of college and put their plan to save the economy in place. They needed to slow the production of money while installing the people’s faith back into the currency since everyone bought in bulk out of fear of the inflation. They created URV’s, Unit of Real Value, which, despite the name, wasn’t real at all; it was virtual. The URV’s were given to the people and instructed them to use it just like money. The catch was the value that they held; the inflation was still climbing but instead of paying $1 you payed 1 URV, and next month instead of paying that $2 you payed 1 URV. URV’s held value for everything purchasable in Brazil but the prices never changed. Eventual the currency balanced out and Brazil actually started using the URV’s as their permanent use of money. So for Brazil the people were using money that wasn’t real, and like the people of the Yap islands, the value wasn’t there. The people didn’t know how much each URV was valued at, but it didn’t stop them from spending and circulation the wealth which fixed their problem in the end. Money is a concept in Brazil because the value isn’t always there and it doesn’t matter.
To make this more relatable I looked up the economy that America has been facing for the past decade and tried to compare it to both Yap and Brazil. In America we pass around paper bills that supposably are worth, or were worth gold (gold being the most valuable thing on the Earth at one point). Paper versus gold. Then it occurred to me that not everyone gets paper dollars, physical, but paper checks that claim that money is known as yours, non-physical. That is the same as having a URV that is claiming to be something when you never actually see the physical worth of it, it’s just numbers on a piece of paper, or more recently, digits that change when you check your bank accounts. Having money “known as yours” sounds very similar to having that rock in the water but still knowing that the worth of it is yours. Comparing what I know from the island of Yap and Brazil, this isn’t an uncommon thing. Even in todays day in age and in America is money still concept. Its a circulation of paper that isn’t even present at the time of exchange. Money is a concept here as well.
Money, or should I say currency, has lots of power on a lot of things, but when you boil it all down does it really hold value to it? After analyzing Yap, Brazil, and America on their currencies and how they use them I have come to the conclusion that although currency and money is a very useful system of trade, it has become more of a concept than a physical action. Money is a concept, and the proof is in your wallet.
Friedman, Milton. “The Island of Stone Money.” n.d. Diss. Hoover Institution, Stanford University, 1991.
“The Invention of Money.” This American Life. N.p., n.d. Web
Thomas, M. (2014, October 13). What a stronger dollar means for the economy. Retrieved September 10, 2017, from https://www.cbsnews.com/news/how-will-a-strengthening-dollar-affect-the-us-economy/