Money Over Everything
The monetary system of the people of Yap does seem crazy upon first glance, but when thought about it is very similar if not identical with today’s monetary system. A limestone wheel and an electronic bank balance Have way more in common than you ever thought. Both are completely different at first glance but as you go back in time you can see they are actually very alike. A Big limestone wheel was worth everything while having no actual value or use, in today’s world we have bitcoin, a virtual money that only value comes from people buying it at a higher price. .Since the time of the yap , money has gotten more and more complicated. As a society just put blind trust into the bank to hold our money and hope that when we want to spend it, it will be there.
The Island of Stone Money shows us how the Yap people used their simple but effective monetary system. The Island of the Yap was a small island which had a population between five to six thousand. In 1903, William Henry Furness III studied the culture of their community. What he found most fascinating about them was there monetary system and rightfully so it was remarkable. Their Currency on the Island of Yap was called fei. Since they had no metals at the time they used immensely thick and big limestone wheels that could be up to 12 feet big. The most bizarre part is that this money is only ever exchanged by word of mouth. Their system worked so well that once the stone is acquired it is placed in a singular location never to be touched again. When the rock was used as payment, people were aware that the ownership of that rock had changed and acted accordingly. Friedman recounts a story of a crew from Yap that went to retrieve limestone from the island on which they harvest it, but on the way back weather got really bad and knew having this big rock increased there likelihood of dying. For the safety of the crew they tossed it overboard.While the crew made it back the rock did not and even though no one but this crew ever laid eyes on this carved stone, everyone in the community trusted that it did exist. It was even enough for someone to have ownership of it and the value of the stone would be the same as it would be exchanged anyway. In the late 1800’s the German government acquired the island of the yap. The German government soon realized after buying the islands that the island’s roads and paths were beaten down and were in terrible shape. The chiefs of several districts were ordered by the Germans to have them repaired as fast as possible. The people of the island thought their blocks of coral were good enough but the German government had other ideas. They put black “X” on their big limestone coins and told the people that until the roads were done the coins were owned by German government. This worked so well that highways were made across the island. Once they were finished, the German government took away the black “X”’s off which meant the people of the islands paid their fine.
“The Invention of Money” Jacob Goldstein of the Planet Money team observes that most of money is never even hard currency. Salaries are paid in direct deposits , bills are paid online and the proof is numbers on a virtual screen. The only way a central bank will work is all the people have trust. If this trust were to break at any time , the whole monetary system would crash and all money would be worthless. A good example of this is a “Rare” baseball card. It would be worthless but people assign value to it and treat it like it’s expensive when in all reality has no true value. Anything is worth something because someone told you that it is. Money is something that has value because the banks tell you that it exists and that you need it for basically everything in life. We put our trust in them even if we do not see the money. Our Money is not only not seen, but in general most of the money in general does not even physically exist. It is an idea that we have learned to trust, and this trust is placed in the banks just as the Yap Most people don’t carry cash. The world we live in is digital. Cash is slowly fading away in this ascendance of the internet. Most people in the bank and it doesn’t actually belong to a singular person. How They describe your money is they put it into the bank, and then the bank gives it out to someone else on a higher interest rate. He gives that someone else the description of a shoe store owner, he uses that money loaned from the bank and purchases a sign and now that money is once again in someone else’s hands. We as a society just put blind trust into the bank to hold our money and hope that when we want to spend it, it will be there.
The Gold Standard had failed but that led the US into letting people borrow money that they do not have. It worked out so well here other countries adopted the idea of credit which either hurt some of them. Brazil’s inflation increased eighty percent a month and looked like it couldn’t be stopped. Credit destroyed Brazil and only worse when they continued buying inflated items. The U.S. went through its own hell which left us with an extreme amount of debt. When America was introduced which let anybody borrow money they didn’t have as long as they paid it back to their bank. People who couldn’t pay back what they borrowed were in something called debt and when people couldn’t the banks all failed and almost ruined the country.
Red language borrowed from l8tersk8ter’s essay.
Blue language borrowed from clementine’s essay.
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, MarketWatch, 31 Jan. 2015, “The Invention of Money.” This American Life, 19 Feb. 2018,