P1. To list all of the effects money has on our world would be impossible simply because money is what keeps the world working. It’s true, without some form of monetized systems for trading, who would want to work, and why would they do it? Because of moneys value, and the way we (as a society) view currency, we work almost purposefully for the money. The motivation for “gettin’ the money” can fully be credited to what we can do with the money. A piece of papper, coin, or rock (currency) acts like a sort of value placeholder. Through these past classes, and extending work outside the classroom learning about different histories of moneys worth has been fascinating to me just because of its knottiness.
P2. Money is the most basic, yet convoluted unit of measurement to determine the degree of what someone, or something is worth. I say measurement now, (and probably would not have even thought of money being a measurement a couple weeks ago) because it really is a measurement. money measures things like wealth, or any asset with substantial value. For example, if you have a big cow, somehow you acquired this big cow. Two likely scenarios predating this acquisition could potentially be: You were granted through time and breeding this big cow, and now you want to sell it. The other being you just bartered something else with what the previous cow owner thought was of equal value. Without this rudimentary measurement of worth, how would one be able to justify what one owns? This value, in todays society, is expressed through currency. having money backing everything gives everything a tradable value.
P3. These questions of why money has value, or how we assigned the job of having value to an object, can only be answered by examples of how monetary value has been used/how it is used today. Thorough my somewhat extensive research on all of the unfathomable ways money has been used. After all of it, I have come to the conclusion that money is not a real thing. What! how could this be? Relax. It’s a real tangible thing if you consider object currency, but money is a concept. A sort of placeholder for an imaginary unit. After reading about the Island of Yap, located in the Pacific ocean, my thoughts on how abstract money can get began to develop. Picture this, huge limestone carved disks with holes in the middle of them weighing in at about seven or eight metric tons. In the island, these stones, or “Fei” was used as a currency. Massive stone coins that sat where everyone could see them, and everyone just knew who they belonged to. In an essay by Friedman on the concept of stone money, he explains, “… it is not necessary for its owner to reduce it to possession.” The owners of the stone, and the wealth of having the stone did not even need to have possession of this stone. If it was “there” it was recognized as being there. A very abstract concept, but surprisingly effective and efficient for the island. A parallel to this currency of Fei, is our modern day checks, and even bank accounts in general. How much money in your bank account are you actually physically touching? None. Its just some digital number that gives you some sort of worth. Its the same thing as having the stone. People just recognize your wealth by having a big stone, or a big number in your bank account.
P4. My new view on money and how I have come to the realization that it is fake also comes from a story in Brazil. After listening to the NPR broadcast “How Fake Money Saved Brazil” I have gained a deeper confusion on how the money system works. Chana Joffe-Walt, the narrator of the podcast in act one says that, “in 1990 inflation in Brazil was 80 percent a month…” Having such high inflation rates, the Government was at a loss for solutions. A group of colleagues were called in to find a solution, coming up with a virtual currency named, “Unit of Real Value” (URV’s). The government along with the four heroic alumni called in made the decision to lie to the citizens. One of the people on the podcast saying, “… they wanted to change people themselves… people had to be tricked into thinking money had value.” (Joffe-Walt). Persuading them that their money actually had value was the only way to save the economy, and the value of their currency. “The idea was that people would start thinking in URVs – and stop expecting prices to always go up.” (Joffe-Walt). Brazil lived with high inflation rates for decades, if this problem could be solved so easily by making up what seemed like a lie to get them out seems counterintuitive. Who would think that would work? Well, It did, and that’s what saved Brazils economy.
P5. Today, we have a new complicated currency called Bitcoin. In 2009, Bitcoin software was made available to the public for the first time. Although Bitcoin was the first established cryptocurrency, there were others… but they did not blow up like Bitcoin. Bernard Marr, said in his article called, ”A Short History Of Bitcoin And Crypto Currency Everyone Should Read” said ”As it had never been traded, only mined, it was impossible to assign a monetary value to the units of the emerging cryptocurrency.” (Bernard Marr) Mining was a long process where your bitcoin could grow, but still, no real monetary value. Supply and demand began to grow for bitcoin. Where in 2010 bitcoin was practically worth nothing, to skyrocketing into being worth millions.
P6. I have learned a lot about money these past couple weeks, and I find all of this information very interesting. currency has gone through so many stages, and adaptations to new society’s. Not a lot of people are familiar with things liken the island of stone money, and I certainly was never taught it. History has presented us with many crazy currencies… which brings me to the question, “whats next”? What new currency, or value of something will go up/down? We will never know until we get there.
- 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>.
- Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.
- Bernard Marr. ”A Short History Of Bitcoin And Crypto Currency Everyone Should Read” 2017.