P1. “The fictional quality of money is inherent in the very idea of money itself, in any form of currency, no matter how simple.” Reporter Jacob Goldstein came to this revelation after learning about the invention of money by reading a book titled “The Island of Stone Money”. Written in 1910 about the island of yap and their form of currency, rather shocking comparisons can be made about our economy today with the economy of Yap. Community members would literally use huge stone sculptures as a form of currency, hence the “stone money” reference. These unnecessarily large forms of currency always stayed in the same spot and were never moved; even if the owner changed, it was always understood whose money was whose by a simple mark made on the stone. It wasn’t until one of these sculptures fell to the bottom of a body of water that the idea of the fictional quality of currency first came about. Even though the sculpture was no longer visible, it was still considered to have value. Sound familiar? Money is nothing more than an idea, currently backed by nothing but our belief in its existence.
P2. The reality of money relies solely on us and for our sake, we must keep the faith. If we didn’t believe in our form of currency, we would not be able to function as a society. There was a time when the society of Brazil, now the 8th largest economy in the world, lost all faith in money being real. Inflation was at an all time high and although many attempts were made, nothing was able to be fixed, and so the ambivalence continued. It was like living in an economic twilight zone, where the second you received your check from work, the clock of its value immediately begins ticking. Imagine getting a check for $1,000 and knowing that if you didn’t spend it by the end of the year, it could be worth as little as $250, only a quarter of the value that you worked so hard for. The longer you waited to spend, the less money you had to do so. It wasn’t until the idea of “virtual money” was presented by four college buddies to end inflation and better yet, restore faith in the Brazilian currency. This virtual aspect of money is now vital to most societies today.
P3. The United States is definitely one of these societies; our faith is based on this same virtual aspect of money. As a matter of fact, everything about money now is completely digital. We are able to go online and see our balance, our checks that have been directly deposited into our accounts, but this not actual, tangible money. All it really is is just information that is being transferred to and from your bank. It is simply not real or backed by anything, at least it hasn’t been since before 1933, a time when money in the United States was backed by gold. The year is now 2018, where mass consumerism has spread like a disease and all your money is all you’ve spent it on.
P4. For something that is in reality not real at all, it is anything but simple. To keep a stable society, changes most consistently be made. Changes every six weeks, to be exact. Our federal reserve holds a meeting every two and a half months to decide whether we need more or less money in our economy. Too much money will lead to inflation, while not enough could put the breaks on the economy. The decision is extremely important, but the task can be done by the push of a button. It really might as well be magic. Between the years of 1933-2008 the United States went from 8 billion to 2.4 trillion in money produced. That’s a lot of imaginary cash.
P5. One of the newest forms of currency today is Bitcoin. It has been argued that Bitcoin is a fictional form of currency, which leads one to wonder when the true concept of money and its origins will be understood. The goal for bitcoin is to eventually have a more stable relative price compared to other currencies. The privacy that comes with bitcoin and its irrelevance to actually have to spend it is what makes it so unique. However, it is clear that without keeping a strong following base or “believers”, it will simply disappear as many forms of failed currencies have done so before.
P6. Comparing money to religion on a social level can give one a much better insight on how we perceive things to be real. When something is socially constructed, like an economy or religion, the importance is found in that belief system itself, not in the dollar or in the worship of a god. Your paychecks and your prayers would mean nothing if you did not belong to the society or community that holds them to be so sacred. That is where the existence lies.
P7. It proves very interesting to see how many different forms of currencies are made up, changed, and used when none of them actually even exist. The complications that come along with practically every form of currency is difficult to understand when we are the makers ourselves. The reality is, money controls every aspect of a person’s life, but is not in reality factual itself. The most frightful thing of it all is how unattentive or if not, then uninterested society seems to be about it. The system works, so why question it? Let’s face it, nobody wants to deny the actuality of money when they need it to survive.
Renaut, Anne. “The Bubble Burst on e-Currency Bitcoin.” Yahoo! News, Yahoo!, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html.
Glass, Ira, et al. “The Invention of Money.” This American Life, 7 Jan. 2011, www.thisamericanlife.org/423/the-invention-of-money.
Friedman, Milton. “The Island of Stone Money.” Working Papers in Economics, E, no. 91, ser. 3, Feb. 1991. 3, counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf.