What is Money’s Value?
Stone money is an interesting concept that may be confusing at first. When we were first learning about it, I was taken aback by the concept that money now has a real value. We only give it value to make us aware of what is happening around us. After reading Milton Friedman’s piece The Island of Stone Money, it brought a new perspective on what money is and the true power it holds. With all of this new information, it is opening my eyes to see that there are different ways that a community can view money and that it may not have a large influence on the people as it does in America.
Looking at the concept of money on the Island of Yap, they had no money on this island, they just used stones as their currency, which seems so strange. There were large stones that were used to pay for things and hold the power of what money was. These stones ranged from one foot to twelve feet, and some of the stones were so large you could not move them from their places. To us in America, this seems like such a crazy way of how to deal with money. They are sign stones that have no value behind them, just the understanding that they were the currency of the town. When Germany wanted to redo the roads in Yap, they put black crosses on the stones which was to show that if the roads were not fixed then the stone would not be valued. Once the roads were fixed, the black crosses were taken off. This seems so unusual to use because why did they have to pay with money? Why did they not have to pay? They paid by having their stone marked, it is all about what the true concept of what money is. Friedman presents this idea of money in a way that makes it hard to comprehend. In America, money has so much value that it is ingrained into our heads that if you have no money you have no power. The real picture is that money does not have value until we give it some.
I listened to The Invention of Money, a NPR Broadcast, and I looked at Act one called The Lie that Saved Brazil. It focused on the current state of Brazil’s currency. Chana-Joffe-walts talks about her experiences with the currency in Brazil. Chana uses an example of when she was at a street vender buying a pair of sunglass, and he told her to make payment every month for six months to pay off the sunglass.This method is usually used when you can not pay something in full, so you pay a little by little for a couple of months. Brazil had high inflation starting in the 1960’s causing its money to not hold any real value. The high inflation was due to the government not having enough money to pay for expenses, so they just printed more money. With them printing more money, it made it seem like they had the money they needed, but the money they printed had to be backed by gold or some item that had value. With just printing money, it really does have no value. In Act two of the broadcast, it brought your attention to online banking. This is where there is no real symbol for money, the bank is just moving money around. For example, when my dad pays the phone bill which is online, the bank is just moving money from one place to other places. With the bank moving money around on the computer, it takes away the value that paper money has in our life.
Bitcoin was started as an alternative way to store and keep your money other than a bank. It was created in the wake of the 2009 global crash. Bitcoin is still a complete sign to you, it is not backed up by a commodity. This makes it very unreliable to put your money into. In less than a week, bitcoin shares went from being $266 on a Wednesday to $54 the following Friday, according to The Bubble Bursts On E-Currency Bitcoin, written by Anne Renuat. This is a $212 decrease in less than 48 hours. This kind of inflation is partly due to the fact that there is no real person that is working the code. Instead Bitcoin uses a method called “mining”, which is when you can earn money from bitcoin, but the one flaw with this programming is that it maxes out at 21 million. Onces the mining is complete, the money is put into a digital wallet that allows them to move it into another person’s digital wallet if they’d like. With this process, you do not have to go through your bank and sense it all online, so a person can stay anonymous. Looking at this article and the NPR broadcast about Brazil currency, they have one thing in common which is the high inflation rates that bitcoin and Brazil have. They both have no true value when it comes to the use of them. One day they will hold a lot of value, then the next they will have nothing left.
Money itself has value in it, but if you look at it from other perspectives it may not hold the same value it once did. These articles have made the point that money holds no value, but throughout our whole lives we are told that we need to work to get money because without it you will go nowhere. In retrospect, we are giving so much power to a piece of paper that has no value, unless we give it to it. At the end of the day, money is just an object that was made to represent how much a person has, when in real life there is no value in an inanimate object.
Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.
Glass, I. (2018, February 19). The Invention of Money. Retrieved September 21, 2020, from https://www.thisamericanlife.org/423/the-invention-of-money
Goldstein, Jacob. (2014, February 28). The Invention of “The Economy” Retrieved February 16, 2021, from https://www.npr.org/sections/money/2014/02/28/283477546/the-invention-of-the-economy