Why Is Money So Important?

Everyone knows what money is. It’s extremely important to us. Even if we don’t know it, we use it literally everyday. Money is the source to everyone’s happiness. Having money also allows you to be comfortable and have the freedom you want. It is the reason people go to their jobs or get an education. People believe they would not be able to survive without their money. Money is very powerful and it is something we think about a lot or we don’t think about at all because we are so used to spending it. In reality, money is life for some people, but do you think anyone has ever questioned why we use money or is it just a common thing that we do and consider normal because that ‘s just how we have always lived? From listening to a podcast and reading two outstanding essays about money, its past, and the value of it, it allowed me to come up with this question to seek the conspiracies on money and what other people think and believe about this topic. 

The “Island of Stone Money ” by Milton Friedman talks about an Island that uses stone coins as their currency in replace to how we use green colored paper with a number of how much it’s worth on it. Milton Friedman’s essay states that, “Our own money, the money we have grown up with, the system under which it is controlled, these appear “real” and “rational” to us. The money of other countries often seems to us like paper or worthless metal, even when the purchasing power of individual units is high.”  Is the money we grew up with so real and rational to us because we are just so used to it? We never questioned why we needed money to buy things or why we needed to work to get money just to spend it. Why didn’t we question why money is so important? We just went along with it, got jobs to get money, then spent it, and kept receiving money just to spend it again. Large stones on a distant island were used as money on the Island of Yap. We may think that the stones on Yap’s island are ridiculous, but don’t you think they feel the same way about our paper money? Both objects are worth something, they just look different and may have a different value to it. 

In the NPR podcast, “The Invention of Money” it talks about how a trillion dollars went missing when the housing market collapsed in 2008. After still not understanding or knowing what happened to the money, Ira Glass says, “Money is fiction. So the answer to the question, where did the money go when the housing market collapsed turns out to be that the money never existed in the first place.” So, why are we so fixated on money if it isn’t even real? Why do we constantly think about it and go out of our way to earn it when in reality it’s fake? If money was this important wouldn’t people have gone ballistic to find out what happened to over a trillion dollars just vanishing? Money is entirely fictional and it is simply just a piece of paper that symbolizes the things we value. Paper money is just value that we use to buy the things that we need to survive, and it’s as simple as that. 

Something that was also mentioned in the NPR podcast is related to the Milton Friedman essay on stone money. They talk about the history of Yap’s Island and how they would not initiate trades. To pay someone, you would never actually hand them the stone because the value remained the same, the only thing that’s different is who owns the stone. Owning the stone was their form of payment. In our case, we just give the person the money and then it’s out of our hands. The value of dollar bills or stones is what makes people want more. But in reality, it’s just something that people use to bargain with.

The thought of Bitcoin that Anne Renaut talks about in her article “The bubble bursts on e-currency Bitcoin” is definitely shocking. She goes into detail on how Bitcoin was introduced and created and some people may find this news fascinating. Bitcoin was created in 2009 by someone who wanted a currency that had absolutely nothing to do with a bank. Once this was said, I’m sure many people were conjuring up a question in their minds about how this is even remotely possible. People can just make up their own currency? At first I was thinking, honestly, this sounds truly insane, then I thought about how every form of currency was made up by someone, even our dollar bills. I think it could be possible that any form of currency could just vanish especially if it needs to be. If someone made it up, they can initially take it away. All currency has the same basic goals. It can help encourage economic activity and allows consumers to store wealth and long-term needs. Currency was once limited to the physical coins and dollar bills, but with today’s digital economy and technology, money is now everywhere. It could be that the reason we have currency at all is to make people believe money is real and important. 

Even if we haven’t noticed yet, living without money would be almost inconceivable. Money is very important because of its value in our daily lives. Without money, we do not have accommodation, food, and clothes which are considered the basic necessities. Obviously money is not everything in this world, but it can be powerful in allowing you to achieve your goals and helping you make the best life possible for yourself. Money will always be something that we will never forget. People have depended on money for so many years, and will continue to depend on it. Without money, you may just be poor and that single word is frightening to almost every person. 

References

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991. 1991 Island Stone Money (hoover.org)

Renaut, A. (2013, April 13). The bubble bursts on e-currency bitcoin. Yahoo! News. https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html

“The Invention of Stone Money.” (2011, Jan 7). The Invention of Stone Money. This Is American Life, WBEZ. Chicago.  The Invention of Money – This American Life