Stone Money – Nobinaryneeded

Infinite and Equal

P1. An infinite amount of one-dollar bills is equal to an infinite amount of one-hundred dollar bills. As a society, as a world, we are made to believe that a small piece of paper with a number on it is enough to give us what we need. We could have two one-dollar bills and be able to get a pack of gum and a water bottle. Meanwhile if one has the same piece of paper with a 100 on it instead of a 1, a purchase such as a small flat screen TV or an iPod. Nothing changed on the bill except a number, and even a small number can make all the difference in how much wealth a person in this world has.

P2. Located in the westerly group of the Caroline Islands, in Micronesia is the Island of Yap. In his paper, “The Island of Stone Money,” Milton Friedman tells about American anthropologist, William Henry Furness III’s experience on the Island of Yap. During his visit, he found the way the people of Yap used currency to be of interest. Described as “large, solid, thick, stone wheels, ranging in diameter from a foot to twelve feet,” Furness found the Yap’s money to be intriguing, wanting to figure out how this form of money came about for them. Due to the lack of silver and gold on the island, the Yap resorted to stone once they realized they needed a form of currency on their island so they could buy and sell. This money is also based on trust. A piece of rock, or money, fell to the bottom of the ocean years ago, though the islanders have never seen the money, they still respect that it belongs to someone and that they have that money. Much more trust in this society than most in the world.

P3. In countries such as the United States, one would almost believe that money is something sacred, the way you see people treat it. People kill for money in the United States, giving very little trust to those in possession of another’s money. In the podcast, “The Island of Stone Money,” Jacob Goldstein and David Kestenbaum discuss how economists love the island called Yap “because it helps answer this really basic question: What is money?” They also explain how on Yap; money doesn’t even need to be transferred from one person to another to change its ownership. All it takes is one transaction. They say, “One person gives it to another person. But the stone doesn’t move. It’s just that everybody in the village knows the stone now has a new owner.” This sounds like the ultimate amount of trust.

P4. Sometimes though, trusting people with money is not something that everyone can rely on. In Brazil, the government was able to trick 150,000,000 people into believing that their money had value. Inflation in Brazil, at 80% a month is through the roof, causing something as simple as a pair of sunglasses to be brought from $80 to $340 in a matter of six months. They could not find a way to stop the inflation. That brings this to a very intriguing point. Why is inflation even a concept? From the first paragraph where it is alluded that an infinite amount of one bill and an infinite amount of another are equal, it brings up the question: Is money real?

P5. Who is there to even trust if there is nothing to be trusted with? Like time, money can be seen as an illusion. A physical, tangible illusion, but an illusion nonetheless. We possess paper, coins, or in the Yap’s case, stones, that are worth everything, but if there’s too much of it, it is somehow worth nothing. The Federal Reserve of the United States is responsible for creating money whenever they want, yet the country is still fourteen billion dollars in debt. So why not print more? They do not print more because more money equals the value of it decreasing, yet the less we have, the more it goes up. So why do we not just print the fourteen billion we need to climb our way out of debt? No one really seems to have an answer for that.

P6. There’s a form of e-currency out there called Bitcoins whose value drastically jumps from the two-hundreds to the fifties. In the article, “The bubble bursts on e-currency bitcoin,” by Anne Renaut, she goes on to describe the digital currency as something “which was created in 2009 in the wake of the global financial crisis by an anonymous programmer who wanted a currency independent of any central bank or financial institution.” This is another way of proving that money isn’t real. Someone decided that they did not like the way their money was being handled, therefore they just created a new one. The way money is used here, the drops, the raises, the way it is handled is almost fictitious. It seems that if someone is not satisfied by the way their money is being handled, they change the value, or create something new. In what was does that have value?

P7. Back to the Island of Yap, they do not have debt, because how can there be a shortage of rock? Money on Yap is less physical and more transactional, based on trust where one can just say “this is yours now” and it will belong to them with no questions. Yap is a place built on trust, rather than America, where people need to see their money to believe that it’s there and valuable. There’s that classic phrase in movies and TV shows: “Show me the money.” The character in whatever situation they have found themselves in won’t do what they are being told to do until they see their reward, which is not something absurd, but when Americans hear about how the Yap deal with their money, it sounds absurd then.

P8. Money is nothing but a concept. Each place in the world handles it different, yet we all seem to think it is one of the most important possessions one can own, when in reality, if one thinks about it, money is an illusion. Tactile, but still, money is not real in the long run.

Works Cited

Blumberg, Alex, and Dave Kestenbaum. “Weekend At Bernanke’s.” Audio blog post. www.thisisamericanlife.org. N.p., 7 Jan. 2011. Web. 18 Jan. 2017.

Friedman, Milton. The Island of Stone Money. Feb. 1991. Working Papers in Economics E-91-3. The Hoover Institution, Stanford University.

Goldstein, Jacob, and David Kestenbaum. “The Island of Stone Money.” Audio blog post. N.p., 10 Dec. 2010. Web. 18 Jan. 2017.

Joffe-Walt, Chana. “The Lie That Saved Brazil.” Audio blog post. www.thisisamericanlife.org. N.p., 7 Jan. 2011. Web. 18 Jan. 2017.

Renaut, Anne. “The Bubble Bursts on E-currency Bitcoin.” Yahoo! News. Yahoo!, 13 Apr. 2013. Web. 21 Jan. 2017.

Weeks, Linton. “The Trouble With Trillions.” NPR. NPR, 22 Aug. 2011. Web. 22 Jan. 2017. http://www.npr.org/2011/08/22/139846133/the-trouble-with-trillions

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2 Responses to Stone Money – Nobinaryneeded

  1. davidbdale says:

    NBN, I want to applaud you first on the consistency of your message and your tone. You don’t confuse readers by wandering or being extraneous. You chart a course and stay the course. That’s all good. Where your essay needs work is in clarifying what precisely you mean by calling money unreal. You declare it consistently, but nowhere do you help readers understand what you mean by that assertion.

    Here are your claims:
    —1. even a small number [on a bill] can make all the difference in how much wealth a person in this world has.
    —2. This money is also based on trust. [The Yap] respect a piece money [that] fell to the bottom of the ocean years ago, though the islanders have never seen the money.
    —3. People kill for money in the United States, giving very little trust to those in possession of another’s money.
    —4. On Yap, one person gives [money] to another person. But the stone doesn’t move. It’s just that everybody in the village knows the stone now has a new owner.” This sounds like the ultimate amount of trust.
    —5. [In Brazil] trusting people with money [was] not something that everyone [could] rely on. The government tricked 150,000,000 people into believing that their money had value.
    —6. Why is inflation even a concept? From the first paragraph where it is alluded that an infinite amount of one bill and an infinite amount of another are equal, it brings up the question: Is money real?
    —7. Like time, money can be seen as an illusion.
    —8. If there’s too much of it, it is somehow worth nothing.
    —9. Why do we not just print the fourteen billion we need to climb our way out of debt? No one really seems to have an answer for that.
    —10. Bitcoin was created in 2009 by an anonymous programmer who wanted a currency independent of any central bank or financial institution, proving that money isn’t real.
    —11. It seems that if someone is not satisfied by the way their money is being handled, they change the value, or create something new. In what way does that have value?
    —12. Money on Yap is less physical and more transactional, based on trust.
    —13. In America people need to see their money to believe that it’s there and valuable.
    —14. Money is nothing but a concept.
    —15. We think it is important, but in reality, money is an illusion.

    Good. Money is an illusion. Now, in what way does that matter?

    Example. I think I am a cocker spaniel. It’s an illusion, but only I am affected. The illusion matters only to me.
    Example. The President wants to reassure the country that the economy is doing well, so he points to the recent high Dow Jones Industrial average. Stocks are selling at record prices, giving the illusion of a strong economy. But the companies are boosting their profits (and stock prices) by slashing jobs and wages. The stock market gives the illusion of a strong economy, but the majority of workers are doing worse.
    Example. An entire population believes in a benevolent deity that rewards good behavior with an afterlife eternity of bliss, with the result that people are cooperative and kind and contribute to the overall well-being of the group, regardless of the fictional nature of the deity.

    Which kind of illusion is money? Is it based on self-deception? Is it a devious way to present data to prove something that isn’t true? Or is it a fictional construct shared by an entire culture for convenience, one that just happens to be quantifiable and keeps things running smoothly?

    Let’s examine some of your claims in light of this question.

    —1. Of course the number on the bill is important. The $1 bill represents just one item. The $100 bill represents 100 of them and can be exchanged for 100 of them.
    —4. Yes, the Yap system is based on trust, not the moving of stones. But I can buy a shore home from you without either of us visiting it. We exchange objects of value all the time without moving the objects.
    —5. The Brazilian currency always had value. Every year, workers had to get massive raises just to keep up with inflation. If money had no value, raises would have been useless. Instead, they were indispensable. The new currency just achieved a more stable value (that was some trick!).
    —6. This speculation is not very fruitful.
    —8. In this way, money is like most commodities. If there’s too much rain, fish, or original television programming, you can’t give the stuff away! Nobody will buy it.
    —10. Bitcoin would prove that money isn’t real if nobody accepted it in return for products. The fact that they do proves that it IS real. Water is real, but it’s not a real currency until all the fresh water is gone and people will trade anything to get it. Then, nothing will be MORE real than water.
    —11. Baseball cards had no value until somebody wanted one to complete a collection. Poker chips aren’t currency either, except where they have value.
    —13. If you showed that football player a contract, he’d accept that as “money.” He doesn’t need to see the stacks of greenbacks, and he won’t if he suffers a career-ending injury.
    —15. The fact that “money is an illusion” doesn’t make it less important, once you identify what sort of illusion it is.

    Does this help clarify your thinking in any way, NBN?

    • nobinaryneeded says:

      Hi, sorry for the delayed response, the past few days have been hectic. Thank you for the feedback, it very much helps clarify my way of thinking and has given me some ideas for improvements. Again, thank you for the criticism it’s very much appreciated.

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