Rich In Imagination
Money makes the world go ‘round. For centuries, human beings have used some form of currency to barter or trade for goods and services. Capitalist American society was built upon this concept. Good men have fought and died over planet-wide capital disputes, dating back as long as civilization has existed. But what is money? Is it a piece of paper? A golden coin? A bit of digital information, powered with the energy of a supercomputer? To the natives of a small Pacific island called Yap, it was not a single one of these things. For the islanders, to be rich meant to have a carved deposit of limestone they called “fei” in their possession.
On NPR’s podcast “The American Life”, there was a discussion hosted by the Planet Money podcasters. They talked about the complex history behind the fluctuating Brazilian economy. After a new rise in power, Brazil’s desired currency (referred to as the “Brazilian real”) came to a halting crash, setting into motion almost fifty years of high inflation and destitution. When the 90s came around, a group of four economists were able to create a new form of money (referred to as URV) and reset the Brazilian currency. Slowly but surely, the economy began to advance and the hardship came to an end. These economists saw a country facing poverty and simply created a new and highly valued currency to restart their monetary system. This shows that money only holds value when people believe in it. A system of currency only works if we allow it to, and we get to decide what that means.
Not unlike the Brazilians, the Pacific islanders that resided on Yap also had a uniquely functioning economic system. They did not use dollars or coins but derived currency from limestone deposits discovered on an island hundreds of miles away. In his 1991 essay on the subject, titled “The Island of Stone Money”, Milton Friedman discussed the strange monetary habits of the islanders and how easily it could be bent and adjusted to another more powerful country’s will. He described the money as such, “Their medium of exchange they call fei, and it consists of large, solid, thick, stone wheels, ranging in diameter from a foot to twelve feet, having in the centre a hole varying in size with the diameter of the stone, wherein a pole may be inserted sufficiently large and strong to bear the weight and facilitate transportation.” Even stranger, Friedman begins to describe the ways in which they would use these massive stone coins did not require the owner to have them in their possession. In order to not have to move the heavy limestone every time someone made a purchase, it was eventually decided that all one had to do was claim or be given ownership of the “fei”, in the name of convenience. Friedman continues with a story about a family on a nearby island with undisputed wealth. Their “fei” was very large and in beautiful condition – or so they claim. You see, no one had ever actually seen their “fei”, not even anyone living in the family itself. Many years before, one of their ancestors supposedly found the marvelous piece of stone and sought to bring it back home to his island. Unfortunately, while making his return on a sailboat, this person had to cut free the stone in order to survive a nasty storm. The “fei” sank to the bottom of the ocean. However, when the man returned and told of just how valuable the stone had been, it was universally accepted that the family’s wealth was not discounted just for the fact that their money sat some 100 miles away, deep underwater. Friedman wrote, “The purchasing power of that stone remains, therefore, as valid as if it were leaning visibly against the side of the owner’s house.”
In 1898, after purchasing the Caroline Islands (of which Yap belonged) from Spain, Germany assumed ownership of the island of Yap. Because the island strayed away from more modern practices, the roads of the island were unpaved. For the islanders, it was unnecessary to have paved roads because the island terrain was easy on their bare feet. German officials demanded that these roads be put in “good shape”, but seeing as the roads were no bother to the citizens, they ignored this and carried on. At first, it was decided that those who defied would be charged a fine. This was a difficult thing to accomplish because the Yap currency was so vastly different from their own. But, before long, the Germans came up with a plan. Someone was sent to the houses with considerable amounts of “fei” to paint black crosses on them. Surprisingly, this worked. Thinking of themselves as destitute, the islanders paved the roads as they had been asked to. After the fact, the Germans removed the black crosses and the citizens believed they were wealthy again. Friedman, finding this a bit ridiculous, wrote, “Unless you are very unusual, your immediate reaction, like my own, will be: “How silly. How can people be so illogical?” He then went on to defend the people of Yap, citing instances in which similar things have happened in civilizations considered far more developed than that tiny Pacific island.
While it would be easy to hear a story like this and laugh, but it begs an important question. Does money only have the value we assign it? And if that is true, does it really have any value at all? Like many of the institutions created and worshipped by man, currency exists simply to give us some kind of purpose. We cheer for men that hold 90% of the nation’s wealth while many of us must suffer in hunger and poverty, and give such power to these people because they hold capital that has been proven to be easily swayed to a bigger power’s will. I hope that one day humanity may find a better way to trade and barter, but until then, we will let our greatest creation control us.
NPR. (2018, February 19). The invention of money. This American Life. https://www.thisamericanlife.org/423/the-invention-of-money.
Friedman, M. 1991. The Island of Stone Money. Working Papers in Economics