For decades, American people have used their currency without ever questioning too much about it. The US dollar, to us, is reliable and realistic. We have become so accustomed to our currency, that any alternative form of money seems outlandish. Personally, I have never thought about the logistics of the US dollar before listening to the NPR broadcast, with the Planet Money Team, “The Invention of Money”. During this session, the island of Yap and its unique approach to currency is discussed. Initially, Yap’s method of using large rocks in place of paper currency seems outrageous. As the broadcast continues, this stone currency, that appeared to be so counterintuitive, presents itself to be more logical. With careful investigation, it becomes evident that Yap’s stone money is much more similar to the US dollar than we may believe.
In Milton Friedman’s essay, “The Island of Stone Money,” the technicalities of this currency are explained. “As their island yields no metal, they had to recourse to stone; stone on which labour in fetching and fashining has been expended, is as truly a representation of labour as the mind and minted coins of civilization.” The stone used to create these larger than life coins, called “fei”, is limestone. The limestone is sculpted into sphere-like shapes up to twelve feet in diameter. Then, holes are drilled into the center for potential transportation with the help of an extremely strong pole. These coins are used exactly how one would use their credit card or twenty dollar bill. The only difference is they rarely ever move. Instead, when one of these stone coins changes hands, it is just universally known and accepted that it now belongs to the new owner.
In order to understand the similarities between the US dollar and the fei used in Yap, it’s important to recognize how far the system of American currency has come. Before cash and credit cards were available to the public, bartering was used as payment for goods. This is very different from the cashless transactions we see today. “I pay my bills online… you don’t have to touch it (money), you don’t have to see it, it’s just information,” The Planet Money Team explains on the NPR broadcast. They go into further detail of how there is no physical exchange of cash between the bank and the phone company when a bill is paid online. Despite this, the payment is still considered valid and complete. This is very similar to how the fei’s do not have to be physically moved into the possession of the new owner to belong to them.
One intriguing example of this occurred just outside the island of Yap. Since the raw materials to make the fei was not found on the island, the people of Yap would have to sail out 250 miles to sculpt them. After, they would have to secure them to handmade rafts and bring them back to the island. On one occasion, an intense storm caused one of these stones to be left at the bottom of the sea. “My faithful friend, Fatuma, assured me that there was in a village near-by a family whose wealth was unquestioned, acknowledged by everyone, and yet no one, not even the family itself had ever laid eye or hand on this wealth; it consisted of an enormous fei, whereof the size is known only by tradition; for the past two or three generations it had been, and at that very time it was laying at the bottom of the sea!” Friedman recounts the story. Although we can’t see or hold all of our wealth in cash, we still know that we have possession of it. Similarly, the people of Yap still accept and exchange currency without it having to be physically present.
Before cash as we know it today existed, the gold standard was in effect. Until 1933, cash money was a statement that could be traded in for its equivalent value in gold. Now, the money we use is essentially worthless, meaning there is nothing to back it. The only reason money has value is because we as a society agreed upon it. “We all agree to believe that a paper twenty dollar bill or the numbers in my savings account are worth something,” NPR’s Noel King expresses in his author interview with Jacob Goldstien entitled “What is Money”. The same system of empty faith in a worthless currency applies to the stone currency of Yap. Each of their limestone coins is simply just stone and holds no true value. Despite this, every individual and business in Yap still accepts the fei as payment, much like Americans do with dollars.
Another similarity between the fei and dollar bill is the way government officials can regulate them. “After Germany acquired the island at the turn of the century, its officials had difficulty inducing the residents to repair the footpaths until they resorted to the desperate expedient of taking possession of many of the stones by marking them with a cross in black paint, to be removed when the paths were repaired,” Friedman explains. This black cross is essentially the same as a bank claiming a property as a result of one failing to pay their mortgage. Both the black cross and the repossession of homes have the same effect on the public.
Money is a concept that can be difficult to understand. We tend to think it’s simply a tangible item that we value so dearly, but it’s much more complex. The money we use is more of a well developed theory than anything. Whether it’s paper, coin, or stone, all money is similar in the sense that its worth is dependent on society. Without the collective belief that our money holds value, the economy would be in turmoil. After researching dollars and feis, it’s apparent that despite their differences, they are both extremely similar in their function. Understanding other currencies is a crucial part of learning more about our own.
Friedman, M. The Island of Stone Money. Stanford, CA: Hoover Institution, Stanford University.
“The Invention of Money.” 423: The Invention of Money. This Is American Life, WBEZ. Chicago 2011
Weeks, Linton. “The Trouble With Trillions.” NPR, NPR, 23 Aug. 2011, http://www.npr.org/2011/08/22/139846133/the-trouble-with-trillions.