Its almost impossible to look around and not be suffocated by money in 2018. Well, not your OWN money, but money in general. Basketball players sign new deals worth hundreds of millions of dollars everyday. Rappers talk about dropping thousands of dollars in strip clubs. College students find themselves stressed over their finances everyday, whether it be making sure they’re recieving the correct financial aid, or just making sure they’ve got a few bucks in their pockets and a meal on the table.
These are just some pretty relevant, off-the-top examples involving money that someone my age might see on any given day. Not problems. Just instances where money has its two cents in whatever it is that is being paid attention to. All they show is one thing; the world revolves around money. The industrial world has taken over. Paper money, global banking and little pieces of plastic that we can swipe on a scanner and buy things with. Logging onto your bank account from your Iphone and moving a couple hundred dollars over to another account in 30 seconds. This is the world we live in.
With the world and all of it’s money becoming more and more connected as we move forward into the future, it’s shocking to me that there are still places like Yap.
As I began to listen to the NPR broadcast The Invention of Money, I was introduced to Yap. What is Yap? Yap is a tiny island in Micronesia, once colonized by Germany. What is unique about Yap (in context to money), is that there is no type of banking system. There is no paper money, and no financial records. There really isn’t even a system to measure currency against itself! On yap, the only money traded is limestone, in the form of a wheel. If a deal is to be made, the buyer must present the seller with a limestone wheel. To get the limestone, the natives have to travel by boat, hundreds of miles to an island that has the stone. This seems way too complicated, but its really quite similar to bitcoin, if bitcoin was literal. According to Anne Renaut in The Bubble Bursts on E-Currency Bitcoin, there is only a set amount of bitcoins on the web, that can be mined if you put in the effort. This is similar to the limestone currency limit established at Yap. But, on Yap, they then have to carry the stone back, across the ocean by boat. The size of the wheel isn’t specified, but it is expected that you make sure the stone is of acceptable size for whatever is being purchased.
As wacky as that sounds, it gets wackier. An old legend among the people of Yap tells of a huge blockbuster deal. A massive deal was to be made between two families, and one family set out on their voyage for a gargantuan stone. After finding and crafting it, they set forth home, only for a storm to hit, and the stone to be lost at sea. Deal cancelled? Maybe if this was the MLB. But when they returned to Yap, the deal was honored, based on trust that the effort was made to get the stone. Where the stone lies now means nothing. But the wealth provided by the stone was still passed on.
The economy on Yap is based entirely on trust. The system works because everybody trusts each other, and in doing so, they trust the system. It doesn’t even seem as if the people care very much what happens to the limestone once they actually receive. What is more important to them seems to be the actual act of giving the stone. It is almost ceremonial, as if this is what is actually being exchanged. An acknowledgement from someone else that they are not trying to screw you over. It creates this “what is mine is yours and whats yours is mine” type feeling in the community, which is good, and obviously works for them. The story of the sailors who lost the giant stone at sea, only to still be rewarded upon return, show that the money was never important in the first place. And even after losing the stone, they were still treated as if they were high class and very wealthy among their community.
Its just so hard to imagine this kind of scenario playing out today. Wouldn’t the sailors expect to return home embarrassed and empty handed? I mean, the deal is the deal. So if the stone never even really mattered, why do they even risk their lives traveling all that way for it in the first place? Why not cut out the middle man and just not ask for the stone at all?
The simple answer is that the stone itself is not really the payment. It might be the “currency”, but it is not the payment. These stones are very large, heavy, and hard to carve. To present someone else with even a small stone takes a lot of time and effort. Adding onto the fact that the stones themselves are on another island, and it starts to really become a hard task. The payment is the task itself, and the respect earned and given between both parties. It becomes apparent that a wealthy man is not just simply a man with limestones laying all over his house. A wealthy man is one who has respect from those he deals with. Money becomes a figment of imagination, and the actually recognizing of the other party becomes more important.
We see this theme in American history too, only in a more paranoid frenzy rather than a peaceful deal. In Friedman’s essay The Island of Stone Money, he actually compares the Yap people to a scenario from our past. In 1932, France had all of their assets in the US converted to Gold, out of fear that the US would not uphold the gold standard. But, they didn’t want to ship the Gold back to France, so they kept it at the US bank, separated and accounted for in their bank account. This frenzy can actually show signs of how we look at money, as well as taking from what the people of Yap do as well. The French were concerned for their physical belongings in the gold they owned. They were concerned for the money itself. But in the end, they ended up feeling safer and more secure about their money after separating it in the bank, even though the money didn’t move and nothing really happened to it.
Friedman, Milton. “The Island of Stone Money.” Counterintuitive, Stanford University, Feb. 1991, counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf.
Glass, Ira. “The Invention of Money.” This American Life, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money.
Renaut, Anne. “The Bubble Bursts on e-Currency Bitcoin.” Yahoo! News, Yahoo!, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html.
2 thoughts on “Stone Money- misterfries19”
Thank you for posting early, MisterFries. You have a lovely, breezy, clever style well suited to the anecdotes you relate about the Yap. I’m busy overnight with a fresh batch of business writing assignments I need to deliver tomorrow, so I don’t have much else to say right now, but I want to acknowledge receiving this impressive draft and promise you much more feedback soon.
One thing I did notice of concern. Your References section cites Anne Renaut’s Bitcoin article, but your essay doesn’t support that citation. You will need a source to supplement the two Required sources, and the Bitcoin article is a choice you could make, but of course, you’d have to quote or otherwise make use of the material in order to list it in your References.
You’re right. I read the article just to help my understanding, but forgot to mention it. I have added the reference to the article in paragraph 4.