To the natives of the island Yap of Micronesia, the concept of wealth is as simple as varying sized limestone wheels. Whether they are in sight on one’s property, or hundreds of miles away, if the owner as well as his/her peers acknowledges the owner it is considered safe property of said owner. These stone wheels were the key component to yap trading, bartering, and buying. To an outsider of their culture, it may seem absurd. For me, I was somewhat perplexed because how can things of varying sizes be gifted a measurable worth? In comparison to our money, a single USD has a worth of 1, whereas the prices fluctuate compared to other currencies such as the Norwegian Krone. Although different “measures” of how much each currency is worth, to the people of yap their stone currency can be related very much to the modern days system of money.
The USD takes its form in the state of both a type of fabric as well as being used online through banking. Most of the money in the United States isn’t even tangible, it simply just exists by the concept of “faith”; much like the yap. If everyone were to want to withdraw their cash from their banks there wouldn’t be near enough money for everyone, as it exists online when really there is barely any physical money. Although the processes are different, the belief in the stone currency compared to the currency system people use today is very much the same in regards to believing it’s there when the form of money isn’t even real except in peoples bank account balance.
When the USD was based on gold, there was something quite similar to the Germans demanding the yap people to pave their roads. The yap were very resistant, until the Germans “claimed” their currency by marking the stones with a black X. In the “Island of Stone Money”, by Milton Friedman, he discussed that this event is similar to when gold from the USA was to be shipped to France, to save on costs of shipping the bankers of New York simply put the gold in a drawer, labeled it to be Frances money, and just like the USD went down in value while the Franc rose. Even though it was physically in the possession of the Federal Reserve Bank, it belonged to the French. Compared to the Yap’s story of how when the job was done that the Germans assigned, they simply removed the X and the debt was paid.
In the “Planet Money” broadcast, they talked in full about the people of Yap. They told a story of a family on Yap who owned an immense wheel of limestone that was elegantly carved, the biggest ever made, and incredibly valuable… where it is located at the bottom of the ocean. The show talked about how when it was commissioned to be built, on the way back the operators of the boat and rafts the wheel was on got caught in a storm and it had to be cut lose in order to save the sailors lives, and the stone sank to the bottom of the ocean. Generations after the stone sank, the Yap family who’s ancestor originally held the title of owner of this wheel still revel in the riches and wealth of that stone, even though they had no means of getting it back. Much can be said of the way that today’s currency is processed. Most of the money is in bank accounts, the money is transferred online, with not a single person seeing any trace of physical money, and the debt is considered payed. When one buys say a can of soda, the owner of the shop trusts that the bank of the purchaser will transfer the “money”, wherein the funds then belong to the seller of the soda. Money is not seen any time during this process. To the yap, if someone were to describe this process it wouldn’t seem out of the ordinary at all as their entire system of currency is based on the premise of belief and faith, much like the way modern currency is. There simply is very little physical money, and the currency that gets transferred online doesn’t exist outside the realm of belief.
While gathering research that provides examples to my theory that money is a concept that is based on belief and whatever people hold it to, generally in a high regard and a set “value”, I came upon an article on bitcoin, “The Bubble Bursts on e-currency Bitcoin”, by Anne Renaut. This article discusses the online currency called Bitcoin, a mined currency that has a value to it in dollars that fluctuates greatly depending on the market value of it. The article talked about how it was once very profitable, a person could buy a few bitcoins and they would be worth a lot of money, and the next day the value of a single bitcoin could decrease and the owner had less money than he or she started with. This means that bitcoin is essentially a concept with a monetary value given to it that is based on a theoretical value of money; one that rises and falls as swiftly as a single bitcoin was purchased.
Prior to this assignment I believed money to be a set aspect of buying and selling. However, by learning about the people of Yap as well as the French ordeal with the Reserve Bank and gold, I realized that money is more of an idea than a physical thing. While there still is value to physical dollars, as well as the limestone wheels, the concept of it is a just that, a concept of thought. Money retains the value that we as a people give to it, relative to the culture that a specific currency resides. With the USD, it is considered worth less than a European Euro, whereas with bitcoin the high value of it can drop in an instant. With the ever changing state and position of money, it truly isn’t a physical thing, it is merely an idea that we bring value to based on a series of faith and belief that the money we “own” is real, even though that is not the complete truth.
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
Friedman, Milton. “The Island of Stone Money.” Counterintuitive, Stanford University, Feb 1991. https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf
Glass, I., Joffe-Walt, C., Blumberg, A., & Kestenbaum, D. (2011, January 7). The Invention of Money [Audio blog post]. Retrieved September 22, 2018, from https://www.thisamericanlife.org/423/the-invention-of-money