Money. The world uses it, trust in it, and most would say, it runs the world. However, after much research and study on the topic of money, I run into the issue that “money” is dead. It’s not real. Our ideals, and past history relating to money all point to the fact that “money” is really just a concept created in society, but does it really hold? What value does our money have in our current society? How has money changed over the years? All of these questions that I had been wondering about myself were answered through these articles and broadest, I will present to you in order to prove that money is just a mere item, that is fading more and more everyday, as our financial economy is beginning to repeat history.

In “The Island of Stone Money ” written by Milton Friedman, we go all the way back to 1899 and get an anthropological view from William Henry Furness III, about the Island of Yap, a small island in Caroline Islands, that, get this, used stones as their currency. Stones. The island had no metal, so the people of the land used stones as their monetary system, and better yet Friedman says one important characteristic of this stone currency is that the owner does not need to physically hold it in order to claim ownership. If this statement doesn’t go to show how money, since way back then, is just a made up concept, then I don’t know what does. Oh, wait I do know, because when Germany took over the Caroline Islands, therefore having ownership over Yap, in order to push locals into fixing paths and highways, the German Government battled disobedience by simply marking the stones, causing them to be “devalued”. A simple black cross meant the rock was German property. This led to poverty amongst the people, however caused the people of Yap to fix the paths and highways, and after all construction was finished, you know what the German Government did? They just erased the marks and said “okay, here’s your money again” Just like that! 

The U.S suffered this same fate in 1932-33 with France, as the French simply marked American gold as French gold with a mere label. This was one of the factors that led to The Bank Panic of 1933. Our story doesn’t differ much from that of the people from Yaps. The value of money truly isn’t valuable at all if it means that simply marking an object that we see as valuable is enough to devalue it. This article is one of the many that changed my perspective on the reality of money.

Speaking of the reality of money, let’s travel to 1980’s Brazil where the economy was at an all time low because of inflation. Chana Joffe-Walt writes her article for npr titled “How Fake Money Saved Brazil” on how Brazil creates fake, you heard me correctly, fake money in order to fix inflation in Brazil. She states four economists aimed to develop a novel currency that was reliable, consistent and reliable, but with a caveat: it would not be tangible or genuine as it wouldn’t have any physical coins or bills, rather it would be simulated. Guess what, this fake money, the real, replaced the existing money at the time, the cruzeiro, and fixed inflation within the span of 6 months. The real, originally known first as “Unit of Real Value — URV”, was an intangible currency, a concept, literally just a thing that someone decided upon calling the new currency of Brazil. Why did the Brazilian’s trust it? Because the creation of the real stabilized people’s faith in money itself. People’s FAITH in money. If money is a real, not dying concept that is actually important to our society, why would people need faith in it? If money is real, how does this unseen, untangleable money simply fix years of inflation, and cause Brazil’s economy to skyrocket? It is because money is simply a fading concept, one that is even resulting in things like e-currency.

What happened to Brazil happened almost 30-40 years ago, so most people would say it’s an outdated luck of the draw occurrence that happened to dawn upon the Brazilian people. What about today you ask? Money still hasn’t changed, it is still as fake as ever. Bitcoin is currently one of our societies hottest topics when it comes to money and e-currency, but what exactly even is e-currency? “The bubble bursts on e-currency Bitcoin” written by Anne Renaut writes on e-money as elaborate codes of great complexity produced through the use of powerful computing technology. These strings are created through a process called “mining”, winch in short, is a tedious, difficult process done through a computer in order to generate a Bitcoin, the biggest form of e-currency. Because Bitcoin is a virtual currency, not only is it more susceptible to cyber attacks, leaks, and can be created by anyone with a computer, just like how URV’s were in Brazil, it’s a non-tangible, non-visible form of currency, and even worse, a non-useable form of currency. You simply can not “pay for things” with Bitcoin. “But is that the whole point of money?” you ask. Yes, that’s what we all think it is, however, that idea is simply fading, and Bitcoin is one of the biggest, modern day contributors that give to that fact. 

The thing everyone thinks so highly of, the thing everyone wants, is simply that, just a thing. I was surprised through all of this study how the idea of money I once had in my head simply faded as all the facts came forth to show that money is just a concept. Reading and analyzing all of these sources, not only from the U.S but from other countries, all at different times in the world’s history is astonishing to think about. The dollar we hold in our hands is just paper, and just like how I went over in these sources, it can easily be devalued, replaced, and even turned into nothing but computer data, because money is simply just an object, a thing, a concept. Money is dead.

References 

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 

1991.

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 30 Jan. 2015. 

http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil/  

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/