Money – The Elusive Concept
Imagine, if you will, back to the days of trading and bartering. Tangible, useful items, such as cattle, poultry, and grains, were passed back and forth as a sign that the chickens one person was receiving were worth the baskets of grain they were giving in return. These cows and grains didn’t intrinsically have this value. It was placed on them by the people trading them as a means of obtaining something else they needed but didn’t already have. Sounds old-fashioned doesn’t it? Now think of the modern-day system of money used in most countries. Our wealth is no longer represented by our livestock, but rather by little slips of linen in our pockets, or numbers on an ATM screen. We no longer even have physical items to back up our wealth. There seems to be very little, if any, difference between our system and the way it used to work. We place all of our trust in the numbers on our computer screens that tell us how much money we have in our accounts. Money is essential to our way of life, but its value is only that which we have placed on it.
Let’s take a walk on the small Micronesian island of Yap. The Yap people don’t use paper money or metal coins as currency, they use limestone disks called Fei. They have been using this system for hundreds of years. They make a long journey to carve the disks out of the limestone, and bring them back to the island. The bigger the disk, the wealthier the owner. In some cases, the Fei can be too large and difficult to move. When this happens, the Yap agree that the stone has changed hands, while in reality it sits where it was originally placed. They are content with the idea that it now belongs to a different owner. The difference in currency aside, this system is very similar to our own.
Money has an interesting psychological aspect to it. We put so much faith into its so-called “value”, and blindly trust that items are worth the amount of dollar bills assigned to them. But there is a downside to this. Several countries around the world suffer still from inflation and high costs of living. Brazil, for instance, was suffering from extremely high inflation rates: 80% each month. The government had to create an entirely imaginary type of currency, called the real, to trick its people into believing the rising prices had stopped. In reality, the amount of cruzeiros – the actual Brazilian currency – still changed every day, but once items began to be priced in the stable real, people stopped panicking and eventually the inflation rates did go down considerably. Just a few years ago, Japan was experiencing similar economic crisis. A shortage of jobs and lack of economic stimulus. The prime minister introduced newly printed money into the country and made an effort to create new jobs, in order to start the process of stabilizing the country.
Money is such an essential part of everyday life. We have become so dependent on it, and our respective societies are so centered around it, that we couldn’t function without it. We think that economic systems such as that of the Yap are illogical and old-fashioned, but if we take a closer look we will realize that the heart of the idea is the same and always has been.