Stone Money-Douglasadams525

It is interesting that the thing that is said to “make the world go ‘round” is scarcely more than a fabrication—at best, an idea.  The concept of money is one that, while seemingly reasonable on the surface, makes very little logical sense.  Money, for the most part, is simply an idea that allows for people to buy and sells things, but lacks any sort of physical substance.  While people may use money to exchange goods and services, there is seldom any sort of physical exchange.  Money is, simply put, barely even real.

When first listening to NPR’s broadcast about the stone money used on the island of Yap, I was incredulous.  The idea that giant stones, called fei, could have any sort of value struck me as so foreign and irrational that it was nearly impossible to believe.  Even stranger seemed the idea that when these fei are used as currency, they do not exchange hands—there is simply an understanding that the fei now belongs to someone else.  I was particularly skeptical of the notion that one of these stones, in spite of being lost to a storm, was accepted by the entire population of the island.  However, as I thought about and researched this idea to a greater extent, I began to think to myself, is the concept of stone money fundamentally different from the concept of any other money?  After hearing the broadcast titled, “The Lie that Saved Brazil,” I began to realize that money does not have to be a physical thing at all.  This broadcast explained an economic crisis in Brazil that was solved with a currency that was invented—in other words, it did not actually exist.  However, the people of Brazil accepted the idea of this currency, much like the people of Yap accepted the idea of the stone that was said to go missing.  In both cases, there was no actual currency being used, but simply an idea.  This allowed me to better understand the fact that money does not have to have any substance in order to have power.  The only thing that money requires to work is the belief of those who use it.

Upon further investigation, it became even clearer that faith is the only real thing that powers money.  As stated previously, an economic crisis in Brazil was solved with a fictional currency.  However, it was a lack of faith in money that played a large role in shaping this very crisis.  As outlined in the article titled “How Fake Money Saved Brazil,” decades of failed attempts at controlling inflation resulted in the Brazilian people having no faith in their money.  However, their faith in the new currency, called the URV, helped pave the way to what is now the eighth largest economy in the world.  It was the faith in the currency that allowed it to function.  Further evidence of this concept can be found in Milton Freidman’s article, “The Island of Stone Money,” in which he describes the reaction of the people of Yap to their money being claimed by the German government in order to coerce the construction of roads on the island.  While the only thing that the Germans did was mark “a certain number of the most valuable fei with a cross in black paint to show that the stones were claimed by the government”, the people of Yap were so frightened by the idea of losing their perceived wealth that they immediately constructed roads for the Germans.  In this case, as in the case of the Brazilian URV, it was faith in the money that allowed it to function.  There is also further evidence that money requires faith in order to function, which can be found in Jeff Reeves’ Marketwatch article titled, “Bitcoin has no place in your—or any—portfolio.”  Bitcoin, a digital currency that has been rising in popularity during recent years (and, quite interestingly, has no physical representation whatsoever), has been received in a number of ways.  While some celebrate it for being easy to use and for its ability to protect the anonymity of the user, others, such as Reeves, criticize it for having “no real value.”  Interestingly, as outlined in Reeves’ article, Bitcoin is extremely volatile, having ranged in value from $13 to $1,150 per Bitcoin, but dropping as low as $178 per Bitcoin only weeks before reaching the latter value.  While it is true that correlation does not equal causation, it should nevertheless be noted that Bitcoin has been a very unstable currency and has not had the complete faith of those who use it.

As stated earlier, while the concept of money initially seems very logical, it quickly becomes clear that it is in fact an idea that makes very little sense.  In a very short amount of time, I have come to realize that no single form of currency makes more or less sense than another, be it a giant stone or a piece of paper with numbers on it.  I am now aware of the fact that the only thing that gives money any value is the faith that is held by its users.  While money may be largely a fabrication, I now know that this is not necessarily a problem—provided that it is a convincing enough myth for people to believe in.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University, 1991.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.”MarketWatch. CNBC, 31 Jan. 2015. Web. 6 Sept. 2015.

“The Invention of Money | This American Life.” This American Life. N.p., 7 Jan. 2011. Web. 06 Sept. 2015.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” Npr.org. NPR, 4 Oct. 2010. Web. 6 Sept. 2015.

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3 Responses to Stone Money-Douglasadams525

  1. douglasadams525 says:

    Feedback requested and provided.
    —DSH

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  2. davidbdale says:

    Douglasadams, this is a very fine first draft. You do a number of things very well, and overall the work is strong and the phrasing persuasive. I therefore suggest that you shred the draft and save very little on the way to a much more successful version of this analysis. You’ve taken the important first step of getting your first impressions “on paper.” Now begins the real work. Ready?

    P1. You begin with a strong claim that money is an idea. Most readers will not have thought of money as an abstraction, so your statement will sound counterintuitive, provocative, compelling. But what do you do with the rest of your paragraph to develop this good idea?
    —You claim that money is unreasonable,
    —then that it is illogical,
    —then repeat that it’s an idea,
    —then claim, oddly, that it “allows people to buy and sell things,”
    —then claim that it’s not physical (although we all have at least a few dollars in our possession at all times),
    —then repeat that it’s used to buy and sell,
    —then modify your “it’s not tangible” claim to: it’s seldom physical,
    —then finish strong by calling it “barely real.”

    You began with an abstraction, then spent four more sentences piling up additional abstractions, to demonstrate that money is an abstraction. I’m going to suggest very strongly that you need to blend in some tangible details to demonstrate your point. To illustrate the abstract nature of money, suppose you reminded us how often we write checks, swipe cards, enter our credit card numbers into computer forms, punch numbers into keypads, all without the presence of a single piece of currency. The absence of what we usually think of as the physical form of “money” will prove your point visually. Dollars will be invisible in these transactions.

    After all, you’re going to use the Yap and their stationary fei in your next paragraph. Be sure to anticipate that in your first by demonstrating how seldom our own dollars have to change hands.

    P2. This is 2 paragraphs, Douglasadams, the first regarding the Yap, the second regarding Brazil. Break it out and develop both. I’ll call the Yap sentences P2a.

    P2a. You begin with an expression of your incredulity that Big Stones could be money. The stones are decidedly physical. Your readers will be confused. You’ve told them that money is an abstract idea, rarely physical, but now you express amazement that it could be fiercely physical. That they don’t have to change hands is an abstraction. That they could have value when never seen is yet another abstraction. So what is it about the fei that surprises you?: their physicality or their non-physicality? When you claim, rhetorically, that the fei are just like other currencies, we don’t know in which sense you mean for us to understand this claim.

    P2b. You’re on firmer ground with your opening claim about Brazil’s real. You stipulate clearly that money does not need to be physical. But your evidence doesn’t prove your claim. You say the currency was “invented,” and therefor “nonexistent.” But notes were printed, and are still in circulation today, so like almost every other world currency, they are tangible objects. You must mean something else by “did not actually exist.” The case in Brazil was admittedly more complex. For a time, the real was just a conversion chart that pegged the value of cruzeros to something called a monetary unit. I don’t quite know how to suggest you resolve this tricky transition, but you’re not there yet.

    P3. This is 3 paragraphs, DouglasAdams, the first about Brazil, the second about the German painters, the third about Bitcoin. Break them out and develop them all.

    P3a. In an essay this short, we don’t need any reminders about what we’ve just read, so references to “as stated previously” are needless distractions. Your opening claim, though, that “faith is the only thing that powers money” is your strongest thesis statement. The Brazilians, it should be said, didn’t lose faith in their money, did they? They knew it would buy bread, but they were convinced it would buy less bread tomorrow than today. Consider—ALWAYS—making your claims in just such fashion, with reference to real physical objects, cows or potato chips, or loaves of bread, or sunglasses, as the Planet Money team well demonstrate, to keep your readers physically engaged. Readers unfamiliar with the Brazilian story will have a hard time knowing what part faith played in the reclamation of the currency without illustration.

    P3b. Your explanation/summary of the German cross story is skillful, Douglasadams, but your conclusion doesn’t capitalize. What did faith have to do with the black crosses?

    P3c. At this point, when you want to make the blanket claim that Bitcoin has “no real value,” you might need to back up a step to remind us that the earliest forms of money were made of things that were perceived to be valuable in themselves (gold coins), or were representative of that valuable object (the promise that paper notes could be exchanged for gold). Otherwise, your claim that Bitcoin has no intrinsic value doesn’t sound so surprising. Today we need to be reminded that the credit of the United States government is what gives dollars their value. Without a country behind them, Bitcoins, as you suggest, are pure faith documents: their value is only the belief that others will accept them in exchange for goods and services. If the mirage melts, nobody will buy back those useless bitcoins.

    P4. Your claim that no currency is any more logical than any other is particularly solid and valuable, Douglasadams. You don’t support your claim with anything new or illustrative however, and you should. Bring in cows, chips, something for us to taste here, something crunchy. The only thing that gives money any value is my belief that Wawa will exchange my dollar for a bag of Doritos.

    Do you find this helpful, Douglasadams? I remain impressed with your ability despite my lengthy notes. You have obvious skill that I hope together we can improve. If you elect to rewrite for additional consideration, please start a new post as Haveanelephantasticday did, and title it “Stone Money Rewrite—DouglasAdams525.”

    Thanks for all the fish.

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  3. douglasadams525 says:

    We cannot typically pay for a pair of shoes with a sandwich, but there is an ingeniously powerful thing that allows us to essentially transform shoes into sandwiches, or any given thing into another thing, simply because people say that it can. Interestingly, this thing is physically very weak–scarcely more than a small, thin strip of linen with a few numbers on it, or a tiny rectangle of plastic with bits of information. Often, it lacks any real substance, and can exist only in the world of computer screens. In spite of this, it is arguably the most powerful force in the world–money, which is said to make the “world go ’round,” is scarcely more than a fabrication.

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