Money: The Concept
What makes the world go round, doesn’t grow on trees, and determines if you can get Mcdonald’s? Money is the deciding factor on the success of your business, life and country. Money originally had value because it was directly attached to weight in gold. If I’m handing you this many paper notes then in return I receive its equivalent in gold. What gives gold its value though? Why is paper allowed to be an equivalent? Micheal Friedman in “Island of Stone Money” tells the story of an uncolonized island named Yap. They don’t use a traditional form of currency. Their abstract forms of currency are large rocks.Their wealth is so abstract and reliant on local acceptance that a family whose ancestors are believed to have found a large rock are able to, off of belief alone, be regarded and respected as extremely wealthy. When Germans first colonized the island they couldn’t get anyone to do what they wanted until they devalued the currency that was already largely accepted by the established society.By saying, if there was paint on the large rocks it had no value. The government said rocks with paint had no value so that’s what was accepted. Nothing fundamentally changed about the rock itself except what the government said it was worth. So, this leads to the conclusion that money’s value; though it has the ability to be explained mathematically, is at its core conceptual.
The story of the Island of Yap seems so foreign, faraway and alien to accept the concept that a way a country is able to accept wealth through stones they’ve never seen. But if we look in the mirror it’s the reality we now live in. It’s been said by economists for a very long time that cash as a form of currency is dying. We get paid in direct deposit, meaning we never physically see or touch the money we’re agreeing that we’ve earned. We don’t know anything about all of the money we’re always spending, earning and borrowing. We work and agree that it’s worth this much, the money is deposited to our account and that money is taken and given somewhere else. But, the very money you earn and deposit into the bank isn’t yours. There’s no cash delivered into a box assigned to your bank account that’s being taken in and out each time you buy something. It isn’t real, but money is intrinsically connected to a country’s ability to be successful. The 2008 recession took the country on by storm and its repercussions are still visible to even today’s economy and class structure. But why did it happen, where did it come from, and where did all of the money go? Are questions asked by the people that were present and remember the recession themselves and those who only learn about it through textbooks.
To give a simple answer to complicated questions: they made more money. They as in the Federal Reserve. In the NPR podcast, “The Invention of Money” I learned that the federal reserve is not apart of the government. It’s just a company that controls the wealth and well-being of the country. I find a company being the saving grace from a national recession, dystopian. Despite them not folding to Nixon’s wants because they, “do what’s best for the political economy.” Their main goal within their solution was to not lose the societal value of a dollar. Before changing the rules of how they operated pre- 2008 recession the value of a dollar was decided by a group of people behind closed doors. If money is a made concept how indoctrinated is all of America to accept whatever they say.
We see this in the artificial inflation being experienced by the lower class of today’s society. Yes, I believe it is important to have a definitive agreed upon value assigned to a dollar. But when the people in the room making the decisions have their own agenda it leaves the billions of people outside of it ,vulnerable. It’s said that we are are currently in a recession similar to the caliber of 2008 because of the inflation on buyable goods. But large corporations are experiencing record profit margins. According to The Hill the nonfinancial sector reached a record profit of 2.08 trillion dollars. A recession is a recession when it’s felt by the entire economy not just the people who need to get paid by someone else.
The state of our economy today reminds of the situation I learned about in NPR’s “ The Lie That Saved Brazil.” Brazil faced decades of inflation because they wanted to build a new capital and didn’t have enough money to do so. Instead of waiting until they accrued enough wealth on their own they decided the best solution was to print more money. But the unexpected outcome was that the value of the dollar itself decreased creating exponential inflation. In attempts to get it under control the government would willfully freeze the currency’s value. But the merchants wouldn’t sell anything during this time because it wasn’t profitable for the inflation to not exist. This is where I find the similarities between America’s economy today and Brazil’s before getting it under control. Corporations who benefit from the average person’s ability to spend their money will never act outside of their own interests. So in a world where money is made up and given value because of a social contract, it’s benign that the concept is decided upon by a company looking out for it’s own interest.
Stone Money from the Yap island is absurd, it’s crazy. But so is all money. Especially in America the biggest superpowered country in the western hemisphere that’s also massively indebted to the world around it. These concepts being able to coexist supports the argument of money itself being the concept. Believing in the family’s stone is the same as Americans excepting the country being ran by families whose wealth was created by slave owners and work they themselves have never done. All money in today’s world is stone money.
Thought-provoking and opinionated throughout, QR! I admire how committed you are to making social points wherever possible. Several elegant phrases here, too.