Money, coins, paper, shells, beads, and rocks are all acceptable forms of currency depending on where you are in the world. While today it is more common for cash to be used it is even more common to use just a small piece of plastic to pay for things. In today’s day and age our money is either kept in a bank account and gets taken out with a debit card or the money does not even exist and you pay it back each month using a credit card. When looking into and listening to the NPR broadcast “The Invention of Money” they go back and explain about the history of stone money where they would trade the island of Palau coconuts, or beads in exchange picking up these stones that they use as currency.
The value of money can be questioned even more when I learned from the NPR broadcast that the federal bank reserve even though deals with government money is not a part of the government. So how can the government control us and the money but the amount of money and value of money is not controlled by the government. The federal reserve also known as “the fed” makes money out of thin air almost literally. The Fed will bail out institutions that are on the verge of financial collapse with loans of money that do not exist. This seems almost the exact opposite of what the island of Yap is doing. The island is physically seeing the product they are using as currency and seems to be no loans given out with hypothetical stones. The federal reserve not only bails out institutions but it controls the banks. So when you go to Target and you wait in line with your cart full of things you most certainly did not need and the cashier tells you your total and regret it instantly when you push your card into the machine just think that the money does not exist. To us the number in our bank account is our lives and can put us in a rank in society based on a number where the money does not actually exist. When you go to the bank and deposit money into your account you hand over physical cash which the number value goes into the account but that physical cash may end up in someone else’s account. So while we value this money deeply and we think it has great value to the Fed, it is just a number that can be pulled out of thin air to bail someone out or give someone a loan.
The value and idea of stone to the island of Yap is very simple where if someone decides what they are being offered is not up to the value of stone or fei as they call it then people offer more to up the value. In an article by Milton Friedman he explains the value of the fei and how the currency works and where it comes from. The fei ranges from a foot to twelve feet in diameter and the size of that fei determines how much you can barter for. In the stone itself it is not damaged in any way or decreased in size as it is more bartered off or seen as different values like the 5, 10, and 20 dollar bill. Since these will not fit in pockets or even bags they have holes in the center so a pole can be inserted and they can be used as wheels. The value of these coins had a big hold on people and families that it also created a status even though it was just stone involved. One family on the island had been seen with such power due to the fact that they had one of the bigger stones that had been in their family for generations. Not only did the size of the stone bring power to the family but it was also the story behind how the stone came to the family generations ago from the bottom of the sea. So not only did the size of the stone matter in monetary value but if there were any marks on the stone also brought up the monetary value.
In the past 10 years Japan got approved by the government to release an emergency stimulus spending on 10.3 trillion yen which was pushed by the Prime Minister Abe to start a long economy. This emergency stimulus was to be used to make a commitment with the bank in order to help stop deflation by bringing more money into the economy. With the 10 trillion yen just appearing out of nowhere was seen as a miracle because they have a big amount of debt. With this money everyone was expecting a debt catastrophe to start but it did not in fact in 2009 their interest rates rose hoping for recovery but instead rates went down and were under 1 percent. According to Noah Smith in the article “The curious Case of Japan’s Economic Stimulus” the Prime Minister Shinezo Abe was the complete opposite of an economic hero as he was seen as not interested in economic policies. This article cycles back to the NPR podcast and the value of money because just like the Fed’s Japan even though they were severely in debt they made money appear out of thin air to help their banks and economy.
After hearing the podcast and reading the two articles I can truly say I came out with a new perspective on money. Before I would use cash because then I would not see the money visibly disappear from my account. Now instead I value cash and plastic on the same level as it is all just a number with value stated by the government. I really enjoyed learning about the stone money because other countries still have a coin or paper currency but Yap was able to open my mind that anything can be of value as long as everyone values it.
1991 island STONE money – Hoover Institution. (n.d.). Retrieved September 30, 2021, from https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full.
The invention of money. This American Life. (2018, February 19). Retrieved September 30, 2021, from https://www.thisamericanlife.org/423/the-invention-of-money. Krugman, P., author…, P. K. M. by this, & Fang, L. (2013, January 22). The curious case of Japan’s economic stimulus. Truthout. Retrieved September 30, 2021, from https://truthout.org/articles/the-curious-case-of-japans-economic-stimulus/.