After hearing about the concept of Stone Money for the first time ever in class, I was so confused and I really felt as if the whole idea of Stone Money was just made up. The island of Yap is what made me feel as if it was all just made up, that sounds like more of cartoon place to me rather than a real island. However, I quickly learned through our class lecture that this was in no way made up, it is very important in our history and today because we can compare the money system the island of Yap used to the money system we have in the United States. After reading Milton Friedman’s The Island of Stone Money,listening to NPR Broadcast and also reading about the Bitcoin I was confused in the beginning but by the end of the articles as well as the broadcast they all somewhat relate in one way or another. The world we live in today is full of money in so many ways even if you don’t believe it but there are so many questions regarding money that I’m not sure if they’ll ever be answered.
Listening to the NPR Broadcast intrigued me as well as made me befuddled. I knew that there was a lot of information going to be given through this broadcast but I was really interested when it stated “Money is fiction” because I wanted to know more, I wanted to know what they meant by this statement and how money could be fake. The whole process of banking online blows my mind because I never thought of it as deep as I did during this broadcast. My parents don’t get cash when they get paid, they say it’s pay day every other Friday morning but I never see them cashing their checks or sorting through their money, so I question how is it pay day where is the money? As stated in the broadcast “There aren’t even bills for most of the money that exists. Most of the money that exists is just the idea. It’s just the bank saying, yes there is this much money in your account.” It is the same thing with all of the payments that we must make as adults to live our life, our phone bill for example we are not taking money out of the bank and delivering it to the Verizon store it is just numbers going from our bank account to a company, it is just the idea that the money is there and our bank allows us to take it out because there is enough in there. We rely on money so much for everything in life, we need money to get through days, we need money to get places. But is money really what we think it is?
I was so curious about all of this and went on to read Milton Friedman’s essay to find out more. I was introduced to Yap in the NPR broadcast but it was brought up again in this article. Yap is a tiny island in Micronesia that was once colonized by Germany. The island of Yap does not have a banking system and after I learned that I was curious as to how it had any relation to money and this whole idea. Since there is no paper money and no records of finances there is no system to measure currency because the only money that is traded on the island is limestone and that is traded in the form of a wheel. This exchange was known as “fei” Which again is mind blowing because the size of the wheel is not specific but it must be an acceptable size in comparison to what is being purchased.
Also in Friedman’s article as we wonder about currency and money’s actual worth the story about the French and how gold was involved with money is crazy. How France wanted their gold from the United States is almost identical to the German’s fei. (Friedman) How does it make sense and why would France convert their money into gold? In 1932 that is what the French thought was a good idea and they were afraid to send gold across the ocean so they kept it in the bank having the bank separate it and placed it in their account. This was a big point in history and it is just another example of how many different ways people look at money. The people of France did not have actual dollar bills but they had gold and secured it in the bank and were satisfied. It is mind blowing how many different things can be considered “money”.
Still being confused about all of these different stories of currencies as well as what money is to different people in different parts of the world I went on to read about the bitcoin. In The Bubble bursts on e-currency Bitcoin, the bitcoin’s worth declined from $288 to $54! This just goes to show how you never know what is really going to happen with money, it is pieces of paper with amounts written on there that really don’t have much meaning, stones and even just numbers being sent from one account to another. This point was proven when in the article it stated “bitcoin remains a very uncertain speculative venture.” That also proves the most important point from the broadcast as to how “money is fiction.”
After trying to learn more about money, I am just as baffled if not even more than I was before I started this research. Money has so many different meanings and I do not know if there will ever be one meaning to the term money. I am shocked there is really no currency because the person accepting the money can change it whenever they please. I have a whole new insight on money and how the monetary systems work.
Friedman, Milton. “The Island of Stone Money.” Counterintuitive, Stanford University, Feb 1991. https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf
Glass, Ira. “The Invention of Money.” This American Life, 19 Feb, 2018. https://www.thisamericanlife.org/423/the-invention-of-money
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