Stone Money- sixfortyfive645

My lack of interest in the economy and the way money works had left me with the naïve concept that money is extremely valuable. If I were to receive a hundred dollar bill I would be cautious with it. However, after listening to the NPR Broadcast, “The Invention of Money,” my idea of currency and money all together has changed. I realized that the value of money is manmade, which relates to the idea that was introduced in the podcast: money is fiction. The idea that money is made up is somewhat frightening since it is the reason people go to college and get jobs. Even after researching, my opinions on this idea are mixed. Although it may be easy to not physically carry around money, it may also be risky to be so trusting of just the idea that one has a certain amount of money.

When I first read about the Yap’s currency in Milton Freidman’s “The Island of Stone Money,” I immediately thought their concept of money was more abstract than ours. I thought it was illogical that the people used extremely large pieces of limestone as their currency. I questioned why the limestone was so valuable in the first place. Plus, since the fei was too difficult to transport, Freidman explained that a new owner would simply claim acknowledgement of the fei, and the stone money would remain with the previous owner. I thought of this as unfair since the fei was not physically in their possession, but then I realized that this concept is not much different than ours. When someone gets a paycheck from their workplace, they do not physically have the money they earned. They instead have a piece of paper, or an acknowledgement that they do own more money. This comparison further proves the idea that money is fiction because it is not physically within ownership. I do not see the acknowledgement of owning fei is risky. Since it’s a complicated task to physically move the fei to a new owner’s possession, it seems as though a simple acknowledgement between people would suffice.

In the article, “How Fake Money Saved Brazil” Chana Joffe-Walt explains that four economists created the Unit of Real Value in order to fix the inflation issue in Brazil. The goal was to get the people to stop expecting prices to increase, and to start thinking of things in URV’s instead of the original currency, the cruzeiro. The URV solved the economic problems and Brazil flourished, which again supports the idea that money isn’t real because the URV was a currency that was never in anyone’s physical possession, therefore the money was completely made up. In this instance, the fact that URV was not an actual physical form of currency was a good thing, since it resolved the issues Brazil faced.

Bitcoin is an example of the risky side of money being fiction. In “Bitcoin has no place in your — or any — portfolio” Jeff Reeves explains that a bitcoin’s worth is equal to whatever a random person is willing to pay, therefore, the value of this currency is fiction. Plus, if one’s account were to be hacked and their bitcoins stolen, it would be difficult to find the hackers and get the bitcoins back.

After all of the research, my concept of money has evolved. Money is only an idea, created in different forms. Money is an acknowledgment, a marking on a stone, or a number on a piece of paper that proves one’s wealth.

Works Cited

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

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 30 Jan. 2015.

Reeves, Jeff. “Bitcoin has no place in your—or any—portfolio.” Market Watch. N.p., 31 Jan. 2015. Web. 4 Sept. 2015.

“The Invention of Money | This American Life.” This American Life. N.p., 7 Jan. 2011. Web. 6 Sept. 2015.

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4 Responses to Stone Money- sixfortyfive645

  1. sixfortyfive645 says:

    Feedback would be appreciated!

    feedback was requested.

    Feedback provided.
    —DSH

    Like

  2. davidbdale says:

    I’m happy to comply, sixfortyfive! 🙂

    My method for providing feedback is to respond as I read rather than first reading all the way through. I do so to provide you with a paragraph-by-paragraph reaction to your writing the same as any reader would respond. I hope you find this method helpful.
    P.S. I am very critical of all writing; harsh comments are common. I will praise your work only when I find something truly commendable. If you prefer gentler guidance, you only have to ask. I can be kind.

    P1. Ideas and attitudes abound in your first paragraph, sixfortyfive, but they don’t cohere. You seem to indicate that 1) money isn’t valuable, then 2) that it is valuable but that value is imposed by humans, then 3) we might not have as much as we think we have. Those contradictory notions need to be reconciled.

    Are you saying now that you wouldn’t be careful with a hundred dollar bill? Even if money isn’t worth what you once thought it was, you’d still take better care of a hundred than a ten, right?

    What I’m saying is that the writing can’t be strong until the ideas are clear, sixfortyfive. For example, when you say, “I realized that the value of money is manmade, which relates to the idea that was introduced in the podcast: money is fiction,” are you identifying two concepts or just repeating?

    P2. The narrative flow of “I first read . . . I immediately thought . . . I thought . . . I questioned . . . I thought . . . then I realized . . . I do not see . . . ,” doesn’t seem to be doing you a lot of good. You might be better off describing your current understanding, maybe without even mentioning yourself, rather than narrating so many of the moments of your changing awareness. Maybe: To modern Americans, the idea of using huge rocks for currency seems illogical, but it’s no more abstract than our own money. That sort of thing.

    Yes, of course, a “simple acknowledgment” would suffice, provided there were no disputes. Is it possible nobody ever disagreed about, or forgot, the details of old transactions?

    When you say “money is fiction because it is not physically within ownership,” are you suggesting that all ownership is a fiction? I certainly don’t always physically possess all that I own. If I park my car in a parking lot for a month while I travel, is it still mine? In what sense is it mine? Mutual acknowledgment?

    P3. That’s an interesting claim, sixfortyfive. You’re right that the URV was never a banknote and in that way would have been a very abstract currency. But couldn’t you claim that it was never a currency at all? Until it was ultimately replaced by the real, the URV was simply an exchange rate between cruzeiros and . . . what exactly? This is a fascinating question you don’t ask, but could and should if it doesn’t hurt your head.

    P4. This is dangerous. You can’t just take at face value the claim that Bitcoin is more unstable than other currencies for the reason you state. The value of all money is determined by the person who has goods and services to trade. Nationally it’s Lays, and locally it’s Wawa, who decide how many Doritos to give you for a dollar. That amount of product can vary by 100 percent on a BOGO day. Bitcoin isn’t different than dollars in that way. The person accepting them determines how much to charge. But Bitcoin is different. You just haven’t said how.

    P5. You contradict yourself a bit. Does your “number of bitcoin” prove your wealth? It does if everybody accepts bitcoin.

    As an overall theme, the notion that money is fiction is fine, sixfortyfive, but your various examples don’t all prove the same thing. Figure out what aspect of money’s unreality is demonstrated by your several narratives and provide your readers a richer experience.

    Did you find this feedback helpful, sixfortyfive? Overbearing? Some of each? I can only afford to spend this amount of time on writers who value the interaction. Please reply.

    Like

  3. sixfortyfive645 says:

    The feedback was extremely helpful, thank you. I know I have lots of improvements to make.

    Like

  4. sixfortyfive645 says:

    When I first read about the Yap’s currency in Milton Freidman’s “The Island of Stone Money,” I immediately thought their concept of money was more abstract than ours. I thought it was illogical that the people used extremely large stones as currency. I questioned why such an obnoxiously large piece of stone was so valuable in the first place. American currency pales in the size of the fei, yet we find a delicately flimsy hundred dollar bill immensely valuable. I imagined pushing around a large piece of limestone to ShopRite to buy groceries versus carrying a crumpled piece of green paper that lives in the depths of my purse, the latter is obviously less ridiculous. Friedman, however, explains that since the fei was too large to transport, a new owner would simply claim acknowledgement of the fei, thus the rock would remain in physical possession with its previous owner. At first, this idea seemed unfair since the fei was not physically in their possession, but then I realized that the concept is not much different than of Americans. When someone gets a paycheck from their workplace, they do not physically receive the cold hard cash they earned. They instead have a piece of paper, or an acknowledgement that they own more money. This is similar to the Yap in they are not immediately given the gigantic rock to prove their worth, everyone just knows. This comparison further proves the idea that money is fiction because it is not physically within ownership.

    Liked by 1 person

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