Acceptance of Money
P1. It is said that money does not grow on trees, yet after reading Milton Friedman’s paper “The Island of Stone Money,” I no longer know what to believe. In his paper, Friedman spoke of an island in Micronesia called Yap where the inhabitants used giant limestone disks as money. The concept of limestone money seems outrageous but invited me to research what money actually was. Bernard Lietaer wrote in his article “The Future of Money” that “economic textbooks define money by what it does; that is, they describe its classic functions as a standard of value, means of exchange, and store of value.” To my surprise, it was described as a placeholder for someones current value and ironically enough, limestone money fit that definition as much as the U.S. dollar.
P2. In Friedman’s paper about the Yap, he explained that their limestone currency too large for people to even bother moving! Instead, the community just acknowledges that the currency now belongs to someone else. While this may seem strange at first glance, it’s not that different from our situation now.
P3. Being a soldier in the United States Army, I have no choice other than to have my pay directly deposited into my bank account. I never get to lay eyes on the physical entity of the money, nor do I ever get to touch it. Even though I’ve never seen it, I am told that I have it. This is very similar to how the people of Yap operate. My community acknowledges that I have money just as I acknowledge that I have been payed. I have money I’ve never seen and to pay a bill online, I transfer that unseen money to someone else who does not see it.
P4. Say that instead of paying an online bill, I go to an ATM and withdraw cash. I see this as trading in “fake money” for “real money” offered by the ATM. This is when the value of the real money is brought up. How valuable is the “real money” that the ATM offers? The reality is, it’s nothing more than a piece of paper with numbers on it. The true value of money comes from what it can buy. For example, someone accepts a piece of paper with numbers on it in exchange for a muffin. The acknowledgment of this piece of paper as legitimate payment is crucial in the success of the currency. Just as the people of Yap acknowledged those who had wealth in their country, we find our money’s value in what we can get for it. If looked at objectively, the world economy is a web of nonexistent currency and currency floating on faith.
P5. In “How Fake Money Saved Brazil,” Chana Joffe-Walt explained how Brazil was plagued with an inflation epidemic that was causing basic human needs to become unaffordable to the country. Inflation was rising by 80% a month and the country was doomed. Yet how this was fixed confirms what I stated in paragraph four. This American Life broadcast “The Invention of Money,” explained that Brazil’s inflation problem was solved by the creation of a fake currency system called Units of real Value or “URV’s.” The URV was a nonexistent currency that the Brazilian government had to convince its people was real. In doing so, the people of Brazil began to acknowledge this form of currency and to use it for buying and selling purposes. The people began to realize that the URV maintained its value from day to day, what would cost 10 URV’s one day would still cost 10 URV’s another. With prices no longer fluctuating, the country began to tame its inflation. This faith saved the country and demonstrated how crucial it is for people to acknowledge the value of their currency.
P6. To keep our currency alive, we need to acknowledge its legitimacy. If we acknowledge our country’s currency as legitimate, can we make up our own currency and convince others it’s legitimate? Yes, in fact we can. According to “Private Currency,” this is known as private currency and is actually pretty common. An example of fake currency is credit card reward points. Some credit cards offer rewards point redeemable for restaurant gift cards. We cannot trade these points with a bank for a house, but we can return these points to the credit card company for a reward. Along with that, we can pay credit card companies to even collect points. Many American Express credit cards have an annual fee. By paying this fee, a door is opened to a world of reward points. We pay in legitimate currency to be able to access private currency that holds no value outside the given institution. The company then rewards us when enough of the private currency is built up. This is just another aspect of how fluid money is.
P7. Money is introduced to most at a young age as something that can help find true happiness or destroy any opportunity thereof. When we think about money, we tend to think about the U.S. dollar or the Euro. The reality shows that money can literally be a rock. This concept shows how the backbone behind money isn’t what’s printed on the bill but how it’s acknowledged.
Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money (1991): 3-7. Web. 23 Jan. 2017.
Glass, Ira, Chana Joffe-Walt, Alex Blumberg, and Dave Kestenbaum. “423: The Invention of Money.” This American Life. Prod. Planet Money. 7 Jan. 2011. This American Life. Web. 23 Jan. 2017.
Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 2010. Web. 23 Jan. 2017.
Lietaer, Bernard. “The Future of Money.” BUSINESS: The Ultimate Resource, Jonathan Law, A&C Black, 2011. Credo Reference, http://ezproxy.rowan.edu/login?url=http://search.credoreference.com/content/entry/ultimatebusiness/the_future_of_money/0. Accessed 23 Jan. 2017.
“Private Currency.” Dictionary of Finance and Investment Terms, John Downes, and Jordan Elliot Goodman, Barron’s Educational Series, 2014. Credo Reference, http://ezproxy.rowan.edu/login?url=http://search.credoreference.com/content/entry/barronsfin/private_currency/0. Accessed 23 Jan. 2017.
This is good work, BlackHawk. I particularly appreciate that you found unique sources of your own to amplify the material provided by the assignment. I will return later today to do a thorough evaluation, but for the time being I would like to suggest that you miss an opportunity to make positive claims in your introduction (P1). The paragraph lacks focus, which hinders reader retention. Money is mysterious, and you want to communicate its peculiarity. But the best way to do so is to identify its oddest characteristics.
1. You question why it exists.
2. You call it silly.
3. You belittle the claim that it is necessary.
4. You ask What is it?
5. You briefly identify it as folding currency in a wallet.
6. Then question the meaning of the currency.
7. Then offer the functional definition.
8. Then counter that with a symbolic placeholder meaning.
9. Then conflate that with a measure of personal value.
10. Then revert to the functional explanation that it permits trade.
11. Then acknowledge that time (and presumably effort, labor, work) can generate money.
12. Then ask again, ignoring 5, 7, 8, 9, and 10, if it means anything.
13. In the end, your real question seems to be whether OUR money would be valuable TO OTHERS.
That true question is probably the best place to start. Why does other money seem funny? Starting there, you can back out through the other questions instead of making us work so hard to discover what you truly find mysterious.
Is that helpful at all?
This is very helpful! I will make some edits right now!
I’m removing your post from the Feedback Please category, BlackHawk. You can return it to the category following significant revisions on your part.
I returned the post to Feedback please, with edits conducted to the first paragraph. My paper seems choppy still so any advice you have would be greatly appreciated!
P1. That’s a beautiful first paragraph, BlackHawk. It indicates you’ll be investigating the nature of money, but with the other hand introduces two essential sources quite elegantly, AND switches the conversation from a query into what money IS to the question of what money DOES. Money is a function, you say. If you manage to maintain that point of view, you’ll have written a very successful introduction indeed.
P4. Other than small but essential language issues, I find little to object to until late in the fourth paragraph, BlackHawk. Here you assert that about money “we are told what its value is.” That sounds right until I ask you, “Is your five dollar bill worth a burger and fries?” It’s the other way around, isn’t it? Nobody gives us money and tells us what it’s worth (except in the trivial way of saying that a five dollar bill is worth five one dollar bills). To really drive this home, consider two scenarios.
TODAY: Five dollars buys one cheeseburger. Five dollars also buys an hour in the parking garage.
TOMORROW: Cheeseburgers are still five dollars. The Garage starts to charge 10 dollars an hour.
Did the value of your five dollar bill change? Clearly not, relative to cheeseburgers. But it buys less parking time. Why? Not because the money is worth less (it’s still worth a cheeseburger), but because the time costs more (an hour now costs two cheeseburgers).
P5. Once you absorb my note about paragraph 4, you’ll be better able to explain why the Brazilians were eager to believe in the URV. Unlike the cruzero, the URV could be counted on to be “worth” a pair of sunglasses, day after week after month. As long as 5URV bought sunglasses, nobody cared too much about how many cruzeros cost one URV.
P6. I’m in awe of this observation. You’ve identified a currency we’re all familiar with in a way that highlights the mundane insanity of all currencies. You could get a bit more mileage from your example by noting that “points” can now be purchased with real dollars by loyalty plan participants who want to reach a reward level. They can be transferred to others, too (which means they can be sold to others though the companies do not say so) which makes them seem even more like money.
I like the breezy way you try to wrap things up here, BlackHawk. You lose a rhetorical point or two when you compare money needlessly to religion. Lots of human transactions are based on faith without being religious; contracts, for example. Nobody would say contracts are religious.
Only members of this class will catch your reference to the Germans and their crosses, which means virtually all readers will just be confused.
Finally, the government may track and publish inflation reports, but that in no way indicates that they have set a value for our money. The market takes care of that. Governments try to control inflation with interest rates, but that doesn’t mean they dictate money’s value.
Very high quality work overall despite my many suggestions, BlackHawk.
Provisional Grade posted at the Blackboard Grade Center.
Thank you for all of the feedback! I will be sure to make my edits ASAP
I also removed the post from feedback please so it didn’t clog it up.
I’ve edited stone money and would be open to more feedback if possible! Thanks!
Happy to help, BlackHawk. I’ll do this in two rounds.
Round 1: I’m highlighting in blue some grammar, punctuation, and usage problems you need to recognize and correct. (Green highlights are linked pairs.)
Round 2: I have rhetorical and style recommendations to make as well, but only after you make your corrections.
Hello! I am sorry I am so late! I missed the notification somehow! I appreciate the feedback though. I will work to make these changes now but I will not ask for anymore feedback after this simply due to how late it is. Thank you again!
Thank you again for the help! See you tomorrow!
You have really earned this accomplishment, BlackHawk. Fine work indeed.
Thank you Sir!