“Money is Fiction”

The dictionary states that money is “a current medium of exchange in the form of coins and banknotes”. Money is universal, we need money to make a living, buy things we want, start businesses, and many other reasons. If money is defined as a medium of exchange, how can we really say exactly what it is. Although in our society coins and pieces of paper are given numeral values what’s to say we can’t use something like grass. That’s the real question about money, what even is it? Money can be any object, or it can be nothing at all depending on how one looks at it. This thought makes one wonder is money real or if is it just something to make our society’s run correctly? I would describe money as more of a concept used to place values on things to exchange

If money is just a concept then people can just place a value on anything they want if that society recognizes that as currency or a means of exchange. In the article, “Island of Stone Money” The author, Milton Friedman, talks about the Island of Yap, the most westerly island in the Carolina islands, and how they used their unique form of money. An American Anthropologist lived on this island and wrote a book about the people who lived there and their customs. He describes the people as using large stone rocks, called Fei, as a medium of exchange on the island. Now some rocks were smaller than others, but these weren’t rocks one would move around let alone carry in the back of their pocket, no they were large stones that would not move. The brief acknowledgment that the stone was theirs was enough to satisfy the people and they would use these to trade for important and big goods. Although this seems like a ridiculous form of money one that makes no sense, we can relate this to our own banking system. In 1930 the US “lost” a lot of money for giving the Bank of France gold. The simple version is that the Bank of France asked the Federal reserve to switch all assets into gold, we did this and instead of shipping the gold which would have cost a lot we just moved the gold into a drawer marked Bank of France. We lost a lot of gold because their assets or money were never real in the first place. Relating our concept of money with the people of Yaps shows that money isn’t even real it’s just something society can put a value on. Technically we never lost the money we just moved it to something that said it was the Frenches and they didn’t even really have the gold since it was in the US. The same can be said for the people of Yap they would mark stones that would say it was theirs, but they never moved the stones only acknowledged that it was theirs. In the end, there was nothing really being transferred between people, they just said that they did, and society recognized that as true making most of it pretty much all bull shit.       

The concept of money never has a clear mascot, it changes as time changes or when preferences change. In the broadcast, “The Invention of Money”, by NPR, sheds light on what money really is or how we physically use money. They explain how when someone gets paid there isn’t anything changing in the physical world, yeah you got a paper that has a number on it but when you send that check to the bank there is only a number electronically. Not only this but when Banks must give out loans, they use our own money to lend to businesses so what happens to our money, and was it even there? The real answer is no it was never there, it was only an idea and in fact, there isn’t enough paper money in the world to compensate for all the money people have. In 1990 Brazil’s inflation was up to 80% per month this would mean that a 6-dollar pair of sunglasses after 6 months would be over 300 dollars. This all started because the government didn’t have enough to pay for something so they printed more money than they could spend. Brazilians had to live like this for a while until the government changed the way they use their money. They created the URV or unit of real value a currency that was never printed and was used to trick the people to try to get their faith back in money. Just that statement alone helps prove the fact that money is a concept that people must believe in for it to work.

Possibly the most clear-cut evidence we have for money being fiction is Bitcoin or any sort of e-coin. Bitcoin originally was a currency created to eliminate the need for banks and governments. As bitcoin grew and more people invested in its countries started accepting bitcoin or e-currency as a form of payment. There are many issues with using Bitcoin because you don’t really have any money to show also to cash out of bitcoin someone else has to buy it from you. In the article “The Bubble pops on E-currency Bitcoin” the author, Anne Ranaut talks about how Bitcoin had its first crash. How does an E-currency like Bitcoin even crash since it is a unique form of the internet? To get Bitcoin you have to “mine” which is a long process since bitcoin has a complex code. The Bitcoins software is set to cap at 21 million but pretty much anyone with a computer can gain this sort of money which doesn’t go through any banks or governments. This money was never real but can be used as currency in different countries. It is a very questionable form of money and confusing to think about since the value can’t just be given to someone also people can let their bitcoins sit for years to grow in price making their value constantly changing.         

In conclusion, Money was never real, it was all just a concept we came up with to exchange goods. Shown through different countries’ unique ways of placing value on their money prove that money can be whatever we want it to be if that society agrees and acknowledges it. Not only this but electronic numbers or codes can be used as money to bypass banks. All of this shows that money at the end of the day is simply fiction.   

References

Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015.  https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html/ 

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011. The Invention of Money – This American Life

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