Cash, or crap?
While living in a very materialistic world, it seems people never ask themselves: “what even is money?”, “Where does money come from”, and “how does money even come about?”. The simplest answer: it’s not real. Now, I will say in a society today it does seem apparent to be very real and valuable, but how does such a thing even come about? Well crazy thing is, out of thin air. Money is so made up with no actual value. Money can simply be a rock or a piece of green paper labeled to be currency. While listening to a podcast called “The Invention of Money” they state the most unsettling statement, that money is purely fiction (thisamericanlife.org, 2018). I first heard this while drinking my overpriced coffee I just purchased, and just sat there and pondered for a few minutes. Hearing such a thing really just puts a pit in your stomach thinking about how everything in your life can just really be made up.
The scariest part about money is how the value can fluctuate. In the podcast, they made mentions of the housing market. When the housing market crashes, where does all the money go? Well it turns out, the money quite possibly never existed in the first place. That being said, money isn’t always certain, its value can slowly disappear. In the United States, the dollar in 1913 held the equilivlant as $26 dollars in 2020 (Amadeo, 2020). According to Kim Amadeo, from thebalance.com, three factors can make our money lose value: 1) higher demand for products/ services, 2) restrictions on available supplies, and 3) an increase on the amount of money being printed (Amadeo, 2020). Now in Yaps’ case, how does our concept of money differ from ours? Basically, our money is based on gold, while theirs is based on huge stone sculptures taller than a man. In Yap there was an incident where a crew picked up one of these stones and tried to go across the sea with it. To make a long story short, the boat went through a storm and lost the huge disk stone. Even though this stone is now sitting at the bottom of the ocean, the people of Yap believed their Government and that this sunken stone is still owned by someone, therefore still giving it value despite location (thisamericanlife.org, 2018). Now in a perfect world this makes sense though, right?
Think about current times, we don’t get paid cash in hand, its direct deposit. It’s just numbers that get added into our bank account, so then does that money really even need to exist? The cashless trend started in China when they were allowed to turn in their coins to get paper receipts instead of carrying around these big heavy coins. Same thing happened in America when Marco Polo was amazed how China used paper money, and it has us Americans floored. We stopped with the gold and followed China in the use of paper currency (basically a paper note that was a claim on gold and silver from the bank), but now in 2020, we barely even see the cash. That’s where things like ‘Bitcoins’ jump in. Bitcoins are a form of “e-money” where investing into this software creates a more anonymous way to spend money. Bitcoin can have a negative connotation since it became the way to launder money and drug deals. That being said though, people are weary of those claims saying since it is private money, it can be a direct threat to governments, which leaves them to make these accusations (Renaut, 2013).
Now that we addressed the issues with money, let’s chat about the economy. The economy was created as a response to the great depression, where the government calculates based on the national income. Thats where GDP, gross domestic product, also came about giving value to all the goods and services produced in the country for a year. The GDP does not care about anything but measuring the economy. This measure of GDP can be challenging though, where the US does not count off the book workers or the black market like other countries do. In the 80’s Italy counted its black market and before you know it, the Italian economy grew massive compared to the UK economy. Similar to Italy, US in 2013 slightly tweaked the way we measure GDP which instantly profited our economy $500 billion dollars (Goldstein, 2020).
To conclude, the public faith in currency is what makes the economy what it is today. If we didn’t believe in it there would be no value in anything in life. We would be living like barbarians doing what it takes to survive. There would be no Louis Vuitton or fancy restaurants because we could just simply kill someone for leather or food. So was money just a prop to make us act more civilized? On the other hand, money might have simply just been created just for the government to dip in and charge us taxes. That’s for you to determine. On a more normal note, the world would never be what it is without this exchange of currency. Despite the many flaws in the system, money does create technology to help us advance as a whole, whether it being ‘fake’ or not. Money allows us to explore and learn more about the world everyday. So maybe biting into this idea wasn’t such a bad thing after all.
“The Invention of Money.” This American Life, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money.
Amadeo, Kimberly. “Why the Dollar Is Worth So Much Less Than It Used to Be.” The Balance, 21 Aug. 2020, http://www.thebalance.com/what-is-the-value-of-a-dollar-today-3306105.
“What Is Money? Jacob Goldstein’s Book Explains ‘Shared Fiction’.” NPR, NPR, 8 Sept. 2020, http://www.npr.org/2020/09/08/910586930/what-is-money-jacob-goldsteins-book-explains-shared-fiction.
Renaut, Anne. “The Bubble Bursts on e-Currency Bitcoin.” Yahoo! News, Yahoo!, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html.