Counterintuitive Spring 2023

Does Money Have Value?

I always believed that the money I had in either my bank account had value. My belief was true to me until I was introduced to the story about a Carolina island named “Yap” where their form of currency was a giant stone whereas today in America, we used slips of green paper or colorful plastic credit cards. Money doesn’t have much value until a seller decides it’s worth.

The Carolina  island of Yap had a unique way of currency. Their currency was large circular stones named “fei”. These stones sat on a person’s lawn representing wealth. The islanders believed in this system to pay, giving the stone’s value. Although the idea seems a bit silly, the stones were a physical way to pay purchases and the sellers accepted the fei’s value.

Money is an extremely hard concept to understand all around the world.During the economic downfall in Brazil, a person could pick up a can of soup with twenty or more prices tags, each tag representing a the price of the soup at different days.Every day the prices would change changing the value of the cruzeros.The Brazilian government tried to fix the issue and the price of goods until the idea of virtual money was proposed. Once the economy was able to be stable, some money went from a flimsy green paper to a small plastic card.The seller’s willingness to accept transactions through a plastic card, changed Brazil’s way of purchasing goods. The virtual way of representing money changed from week to week making 1 URV equivalent to a certain amount of cruzeros. The person that sells the good or service determines what the buyer’s money is worth.

Hundreds of years ago in America, the people used gold to pay for goods. According to Milton Friedman in “The Island of Stone Money”, this way of keeping track of money was called the gold standard. Paper money was in use but could be exchanged for gold on demand. It was decided that gold was $20.67 per ounce of gold. Banks put forth the requirement of bills to get one ounce of gold just as the shop owners over in Brazil did with their food prices. Now in America, gold is a thing of the past, our currency revolves around flimsy paper bills and online transactions.

Around the world, money value is variable. The change of the value of money affects different countries economies. After learning about different countries and how they value paper and virtual money, my idea of money has changed. Money only has value because at one point in a person’s life they give it value by giving something in exchange for money. Believing in money is a silly concept to me that I have to accept and live by during my lifetime as the economy and forms of money change.

Works Cited

Friedman, Milton. “The Island of Stone Money.” (1991): 1-5. Feb. 1991. Web.

Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015. <http://www.cnbc.com/2014/12/15/bitcoin-what-to-expect-in-2015.html&gt;.

On the small island of Yap located in Micronesia, large limestone disks the size of cars are what they use for their currency. Sounds weird, don’t y0u think? Ironically though, the most illogical form of currency is a bit more close to home. “Fake Money”, actually saved an entire country that is now rumored to be the next super power. What is the abstract concept of this thing that makes the world go round?

In the Caroline Islands, there is a small island that goes by the name of Yap. The natives, use a currency of “fei.” Fei are large limestone disks the size of cars. The Yap people mined them and carried them back on bamboo stretchers. Fei was not just for anything, though. Fei would only be traded for something very large. It wasn’t so much possession of the fei though, fei was too big to be moved around from owner to owner. Once someone had possession of the fei, everyone knew it belonged to that person or family. Fei was still tangible on the bottom of the ocean, even. One family is in possession of fei that has not been seen for 3 generations. Story has it that the fei was coming by boat to the island when a big storm hit. Although no one has actually seen this specific stone, the stone is still valid in trade. The fei being at the bottom of the ocean is almost like a bank balance. The physical currency is out of reach, yet the value is still there.

From 1899-1919, Yap was a German colony. The roads were in bad condition, and the Germans asked the Yap people to fix them, and refused. As a way of getting what they wanted, the Germans painted large “X” shapes over the fei stones therefore “freezing” their currency. This alarmed the Yap people, therefore the roads were repaired and the paint was washed off. The yap really believed black paint would freeze their money. This is an example of the abstract concept of money. Although the fei is physical and  concrete, the idea is abstract. A black “x” over the fei symbolizes the German’s power over the Yap, and their currency because the Yap believe in this abstract concept of the fei.

In Brazil in the 50’s, the government printed money to build a new capitol. When it failed and accounts were frozen. Everyday the prices for everyday necessities changed drastically. They needed a plan. A man named Bacha coming out of grad school with his three friends had an idea. They made a fake currency. The currency was virtual. They were called URV’s. People still used their cruzeiro, but everything was priced in URV’s. The plan manipulated how many cruzeiros the URV was worth. Prices would change, but the URV’s were stable. Everyone started to get brainwashed by URV’s. The fake money- eventually became real. It became the country’s actual form of currency called the real. Twenty million people rose out of poverty and Brazil is rumored to be the next super power.

Judging from these stories—no matter where you’re from, we all have abstract concepts of money. We don’t all have physical “goods and services” because our required necessities are more complex. Not everything you want to trade, would be equal and it would be complicated. It must be unanimously known that the abstract currency would be used in trade so people feel like they are getting compensated with what they feel their product or service is worth. Some people such as the people of Yap, believe it more than others. For the Yap, the fei was all they knew. From their prospective, their currency was frozen by these invaders until they did what was asked. For the Brazilians, they believed in the URV in my opinion, because they had nothing else to believe in. They were willing to try anything. For the Germans, they knew the Yap were much less developed than they were, and knew that marking their fei would get them what they wanted. And for Bacha, he just wanted to save his country. The abstract concept of money works for any civilization so people feel as though the value of their product is being met.

I think what the Yap would consider so bizarre about our currency is our banking system. It is so complex, and I feel as though the Yap would find it all so unnecessary. To us though, it is necessary because we are a super power. Honestly, i think the way of the fei would be so much easier.   Today our country is trillions of dollars in debt, we have 1% of the people with 99% of the wealth, and to me it does get confusing. I can imagine how confusing and crazy it would sound to the people of Yap.

So what exactly is the intrinsic value of money? The concept that not all things have correct prices. We think somethings value is right, but a lot of times it may not be based on many different factors. According to Sean Edwards at seanedwards.com, “Money doesn’t have value in itself. They have value because we as a society have agreed they can represent our labor”. To me, that rings very true. What can we actually do with it? We can’t drink it. We can eat it. We can wear, sit, or sleep in it. So what really is it? It’s paper. Money is a piece of paper that holds some kind of value in our heads but in reality means nothing. According to Roger Ray, “Real wealth is created when we build something, grow something, mine something, or assemble something.” This is also something I agree with. Whether it be the Yap, the Brazilians, or any society for that matter, we all use abstract concepts of money to represent wealth. Having pieces of paper is not wealth, not really. It is only a concept perceived as wealth.

Before getting this assignment, I never even thought about the concept of money. I remember clearly in 2008 in our recession asking my mom “If America is running out of money, why don’t we just print more?” She laughed. But now that I am more aware of how our economy works, essentially, that’s what we do. I never really knew it worked that way. I always just assumed our money was backed up by gold but now i realize it’s a lot more complicated than that. Why do we have so much faith in things we never see? The Brazilians never saw the URV at first but believed it. The Yap never knew for sure why exactly the fei had value. And we as Americans have so much faith in our country and in our currency but why? I’ve never seen the federal reserve. Or the gold that supposedly backs up our money. So why put so much trust into it? Because it is what we have been told to be true.

WORKS CITED

Edwards, Sean. “Why Money Does Not Exist.” Sean Edwards. N.p., 14 Aug. 2014. Web. 07 Sept. 2015. <http://www.seanedwards.com/zero-sum-fallacy/&gt;.

Ray, Roger. “The Truth about Money: It’s Just a Concept.” Springfield News-Leader. N.p., n.d. Web. 07 Sept. 2015. <http://www.news-leader.com/story/opinion/contributors/2014/02/05/the-truth-about-money-its-just-a-concept/5219425/&gt;.

“How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 2010. Web. 07 Sept. 2015. <http://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Friedman, Milton. “The Island Of Stone Money.” (n.d.): n. pag. Feb. 1991. Web. 7 Sept. 2015. <https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf&gt;.

“The Invention of Money | This American Life.” This American Life. N.p., n.d. Web. 07 Sept. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money&gt;.

“The Invention of Money | This American Life.” This American Life. N.p., n.d. Web. 07 Sept. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money&gt;.

Money is an interesting aspect to life. When asked what money is, most would suggest that it is a thing, and point to their wallet or the paper money in their hand. This is true for any civilization; we all have different ideas of money but it all serves the same purpose. However, money is not a thing, but rather a concept. We use it to value objects of desire in a clear, algorithmic way. And who dictates money always serves as quite an unpredictable variable.

Before being introduced for the first time to these fundamental ideas, I fell in the pit with all of the other conformists. I looked down at Jackson’s face and thought, “I have money right here.” That thought now lies in contention with some of the greater lies I have told myself. Milton Friedman wrote an essay entitled “The Island of Stone Money” which details a small Micronesian island in which the indigenous people use large limestone rocks as their currency. He explains that the stones can be used to purchase things of great value without having to be moved due to their immense and rather inconvenient size. At one point, when Germans were exploring their islands, their arose a situation when the Germans demanded the Yap people construct them roads. The Yap did not respond with labor as the Germans had no leverage without native currency. The Germans, as clever as they were, proceeded to mark the giant rocks with black crosses, signifying that the money was now under German control. Immediately, the Yap responded by building roads in order to regain their wealth. While this seems illogical at first, Friedman is able to draw parallels with the United States government during the Great Depression, citing that they conducted a very similar move sanctioning off gold for the French merely by labeling it (Friedman 2-4). He proved that all monetary systems are in essence the same, despite some seeming less logical on the surface.

Today, we suffer from an even more illogical economic strategy, that being online banking. We are all told we earn money and that money is placed in a bank account, but nobody ever sees it. Chana Joffe-Walt explains that the money we earned is not necessarily real, as it is never physically held, just told it exists. There is no transaction taking place that has real, tangible proof. Furthermore, in our society today, there is an unbelievable reliance on online banking and transactions. Though the money we pay on Amazon is coming from “our” bank account, what does that truly mean? Is it our money? Or is it just a promise that we’re able to trade and negotiate with at our own will?

Bitcoin deserves a notable mention here, as it gained popularity recently and is already notorious for being a questionable investment. The idea behind Bitcoin is to provide an anonymous, easy method to transfer funds, while also not being linked to a specific nationality. They present themselves, them being Bitcoin as currency universal to all. This being said, there is no clear value to them; they have no presence in the real, physical world (Reeves). Bitcoin advertise themselves as being intangible yet still capable of holding worth. Therefore, people see them as being not real, unlike paper money, such as the United States Dollar, which they think is. This leads to those people simply not valuing them as much. The concept of money, in this sense, is a curse as it maintains that currency must have a physical “value” in order for the lie that is money to work.

To us as pawns in a civilization, money is a real thing with real value. But practically speaking, it functions as a system through a series of lies and promises that may or may not be true. Your money in your bank account may have been dropped in the Atlantic Ocean, but it is still your money, and you can still withdraw it from your account.

Works Cited

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. 7 Sep. 2015. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. Livefyre, 31 Jan. 2015. Web. 07 Sept. 2015.

Glass, Ira . “The Invention of Money.” NPR.org. 4 Oct. 2010. 7 Sep. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money?act=0#play

Money: a Complex and Sometimes Intangible Force

We cannot typically pay for a pair of shoes with a sandwich, but there is an ingeniously powerful thing that allows us to essentially transform shoes into sandwiches, or any given thing into another thing, simply because we say that it can. Interestingly, this thing is physically very weak–scarcely more than a small, thin strip of linen with a few numbers on it, or a tiny rectangle of plastic with bits of information. While physical at times, it can also lack any tangible substance, and sometimes exists only in the world of computer screens and debit cards. In spite of this, it is arguably the most powerful force in the world–money, which is said to make the “world go ’round,” is barely even real.

When first listening to NPR’s broadcast about the stone money used on the island of Yap, I was incredulous.  The idea that giant stones, called fei, could have any sort of value struck me as so foreign and irrational that it was nearly impossible to believe, particularly when hearing about a fei that was lost to a storm, yet still implemented into the island’s economy.  However, while reading, I began to realize that the only real difference between the Yap currency and any other currency is external.  If someone on the island of Yap wants to exchange a pair of shoes for a smooth piece of stone, and exchange a smooth piece of stone for a sandwich, who is to say that he or she cannot?  Furthermore, is it that strange to accept the existence of money without seeing it?  While the answer may initially seem blatantly obvious, this idea is no different than accepting the number on the slip from the ATM—in spite of not physically seeing or holding the money, I remain certain that it is there and that it is mine.  As I thought about and researched this idea to a greater extent, I began to realize that the concept of stone money is fundamentally no different than any other currency.

After hearing the broadcast titled, “The Lie that Saved Brazil,” I began to realize that money does not have to be a physical thing at all.  This broadcast explained an economic crisis in Brazil that was solved with a currency that was invented—in other words, it did not initially have a physical form.  Notes were printed at a later time, but there was a period during which no physical representation of this currency was in existence.  Despite this, the people of Brazil used this currency to convert shoes to sandwiches, regardless of never having seen it—much like the people of Yap used the stone that nobody had ever seen.  In both cases, there was no physical currency being used, but an understanding that there was an exchange of a substance that had some value and power.  This allowed me to better comprehend the fact that money does not have to have any tangibility in order to have power.  The only thing powers money is the faith of those who use it.

Upon further investigation, it became even clearer that without faith, physical money is only good for blowing our noses, or for sitting in front of a villager’s hut, growing a very attractive shade of green moss.  An economic crisis in Brazil was solved with an intangible currency, but it was a lack of faith in money that played a large role in shaping this very crisis.  As outlined in the article titled “How Fake Money Saved Brazil,” decades of failed attempts at controlling inflation resulted in the Brazilian people believing that their money could no longer convert as many shoes into as many sandwiches as it could the day before, and even fewer shoes could be turned into sandwiches the next day, and so on until ultimately it was questioned if the currency was good for anything but toilet paper.  However, their faith in the new currency, initially called the URV and subsequently the Real, helped pave the way to what is now the eighth largest economy in the world.  It was the faith in the currency that allowed it to transform any number of items into other things, because the Brazilian people believed that it could.

Further evidence of this concept can be found in Milton Freidman’s article, “The Island of Stone Money,” in which he describes the reaction of the people of Yap to their money being claimed by the German government in order to coerce the construction of roads on the island.  While the only thing that the Germans did was mark “a certain number of the most valuable fei with a cross in black paint to show that the stones were claimed by the government”, the people of Yap were so frightened by the idea of losing their perceived wealth that they immediately constructed roads for the Germans.  Although this may seem silly and primitive at first, let us imagine what our own reactions would be if someone were to take our own debit cards and claim them as their property.  Although the card itself is worth very little (after all, it’s just a piece of plastic—isn’t it?), it represents the entirety of the wealth that we understand to be ours.  Naturally, we would be quite distraught, and do whatever the captor of our cards wanted, in order to ensure their safe return.  Therefore, the people of Yap were rightly upset; like our debit cards, their fei have very little true worth (after all, they’re just pieces of stone—aren’t they?), but they represent much more than that because of faith.  In the case of the marked fei and the Brazilian URV, it was confidence in the money’s ability to transform shoes into sandwiches that allowed to it do just that.

There is further evidence that money requires faith in order to function, which can be found in Jeff Reeves’ Marketwatch article titled, “Bitcoin has no place in your—or any—portfolio.” Bitcoin, a currency that has been rising in popularity during recent years and—quite interestingly—has no physical representation whatsoever, has been received in a number of ways.  While some celebrate it, Reeves criticizes it for having “no real value.”  And why shouldn’t he?  After all, there is nothing to say that a Bitcoin is worth anything.  The United States dollar, whether it exists in the form of a strip of cloth or a piece of plastic, is guaranteed by the government (to a point) to be worth a certain amount.  Bitcoin, however, has no such authority to back it, and relies fully on the faith of its users.  Reeves’ claim is even less unreasonable when considering the earliest forms of currency—in the days of gold and silver coins, the idea of any intangible currency would seem simply laughable.  What good is any sort of currency if it can’t be taken to a shop and traded it for a sword, a sandwich, or a pair of shoes?  This skepticism is reflected in Reeves’ article. Bitcoin is extremely volatile, having ranged in value from $13 to $1,150 per Bitcoin, but dropping as low as $178 per Bitcoin only weeks before reaching the latter value.  Any statistician will tell you that correlation does not equal causation, but it is nevertheless noteworthy that Bitcoin has not been entirely trusted, and also has not been entirely stable.

In a very short amount of time, I have come to realize that no single form of currency makes more or less sense than another, whether it is a flimsy piece of cloth, a plastic card, a gold coin, or even a giant stone.  Ultimately, what matters most is that the people who use a currency believe in its value.  If nobody believes that their money can turn shoes into sandwiches, it certainly cannot, and will certainly fail.  While money may often have little physical substance, I now know that this is not necessarily a problem—as that its users are convinced that it can transform things into other things, the world will still go ‘round.

Works Cited

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

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.”MarketWatch. CNBC, 31 Jan. 2015. Web. 6 Sept. 2015.

“The Invention of Money | This American Life.” This American Life. N.p., 7 Jan. 2011. Web. 06 Sept. 2015.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” Npr.org. NPR, 4 Oct. 2010. Web. 6 Sept. 2015.

Stone Money and the Cows

To think that the monotonous day in and day out effort it is to get a paycheck deposited into an intangible place. To think that the number projected on the screen or the print out the size of a gum wrapper holds everything we have in this world. All of these actions are such eerie thoughts. I did not think about any of this until I once sat through a lecture that informed us on how society looks at monetary value today, but compared to other nations and in the past it was not always like that.

There is an Island called Yap, in the Pacific Ocean, that utilizes their own way of currency in their daily lives. They used these stones that were called Fei. Fei are not originally on their island so small teams of workers would have to cross over 400 miles of rough water in order to mine them. According to the essay The island of Stone Money by Milton Friedman, Fei were these doughnut shaped stones that varied in size depending on the owner’s wealth. The workers would mine these Fei, carve and shape them, then stick a rod through the middle and transport them back to the ship in order to be brought back to the island. If these Fei were too large to constantly be transported they would remain in one area and the title ship would be transferred by word of mouth. These Fei were used in the Islanders day to day transactions. Fei would be used to buy food, houses, materials, or could even be used as a dowry. One time while a team of workers were traveling back they faced a mighty storm. They were carrying the largest Fei anyone had seen. The storm was so bad that they had to cut the rope and watched as it sank to the ocean never to have eyes lay upon it again. When they got back they told the whole village of its size. It was as big as as a cottage and smoothed as baby’s skin. Everyone in the town understood and believed this Fei existed and that the other was of a prestigious standing.

Times and society has changed, so no longer can a person go the store with a full grown cow sized stone and expect a weeks’ worth of groceries, there are new ways of currency that are different than the traditional dollar bill. The new is titled Bitcoin. In the article Bitcoin: What to Expect in 2015, Bobby lee states that “it has small circulation value now, but theoretically, with wide adaption, the circulation value should be 100x or 1,000x what it is today”. With this speculation, it is understood that Bitcoin will become increasingly popular. While bitcoins are completely digital, their size may compared to that of a U.S nickel. In another article, Bitcoin has no place in your- or any- portfolio, the author flat out states that “Bitcoin should not be on your radar”. The author states this in reference to the lost profit over the years. While this statement is presumptions, companies, such as Dell, Microsoft, and overstock.com now let consumers use Bitcoin in their transactions.

While the idea of bringing a stone the size of a potato chip to the store to purchase a can of pop is intriguing, I think it is safe to say that even through the lecture my views on the abstract idea of money have not changed. I will always put my money in the bank and watch over that number on the printed screen.

Works Cited

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

Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.”MarketWatch. CNBC, 31 Jan. 2015. Web. 6 Sept. 2015.

It seems counter intuitive that in an attempt to purify figure skating in the olympics it actually backfired on the olympics committee. Bruce Bower elaborates the results in his article on the subject called ” Figure Skating Judges get a 10 for duplicity”.

The people who judge these games are bought out and influenced to vote for their own countries. The committee has attempted to fix this by making the voting system completely anonymous. However in this attempt vote trading increased twenty percent. There needs to be a change in the selection process for the the next games because it it ruining the sport of figure skating. There should be no compatriots on the judges table for fear of biased scores.

Figure skating judges get a 10 for duplicity

It seems counterintuitive to armor a plane where its been shot and not where it wasn’t. Kevin Drum explains why in his article, ” The counterintuitive world”, the WW2 planes were not being armored in the spots where there were not hit.

If the planes were coming back with bullet holes in some spots, that means the spots were not too essential to the planes life. This is because when the planes were hit in the other spots they never returned home. This can also be shown in other cases like getting sick. Sometimes we wait to see a doctor until the sickness is at its worst and suddenly get all better. We think the doctor cured us but realistically we were cured all by ourselves.

The Counterintuitive World

The Daily Shower Can Be a Killer

It seems counter intuitive to find true causes of death in something that is colloquially viewed to be healthy, such as taking a shower. Jared Diamond discusses in his brief article the concept and execution of “Constructive Paranoia” .

The meat of the theory is that when something has a 1 in a thousand chance to kill someone, that that number might as well be viewed as a 1 in 1 chance. Otherwise one might as well pick out a tombstone.

This perception is a wise one and is a response to a need for Jared Diamond who is 75 years of age at the time the article was written. At his age not only can he be killed by significant and less than likely events, he can be permanently and gravely injured by an even less deadly and vastly more common event. His paranoia is what has kept him from needing a wheelchair, and he argues that everyone employ this paranoia to ensure a better quality of life; as well as a longer one.

Principal encouraged cheating, staffers say

It seems counter intuitive that a principal of a school would lie and cheat. This article covers allegations from 2009 against, the Philadelphia school, Cayuga’s, principal at the time, Evelyn Cortez.

For years teachers, parents, and students insinuated that Evelyn Cortez was encouraging her teachers to help the students and give them answers on their state exam’s known as PSSA’s. This is illegal. In this article it is said that teachers came forward to the inquirer that published this story with details about the allegations. Retelling moments where this principal would strongly hint towards teachers doing this and some teachers even said that there once was security camera footage of Cortez coming into the school early to take and change answers with her.

However all of these accusations were without hard evidence and they were simply just word of mouth from the teachers to the inquirer. The aforementioned security camera footage hasn’t even been proven to ever exist. It was also said that inspectors went to the school and Cortez was never caught and she denies all of these allegations.

The truth of whats really going on at Cayuga remains a mystery. Perhaps the teachers themselves are lying about Cortez as a scapegoat to protect themselves, and maybe the reports of the children were in fact the children scolding the teachers.

‘Hidden’ species may be surprisingly common

It seems very counter intuitive and highly resourceful of biologists to realize that there is more to discovering a new species than simply finding a brand new one.

Biologists realized their research has been gravely mistaken due to their discovery of the higher than previously analyzed percent of ‘cryptic’ species among communities of organisms. A cryptic species is a species that seems almost exactly identical to another species, only varying on an invisible to the eye genetic level. It came to light that what once may have appeared to be a large population of a species, could actually be a whole bunch of seemingly identical, but equally as endangered, groups of sibling species coexisting.

It is fortunate that biologists realized this mistake when they did, now they have to recant and reform the foundation of their evidence about just how many species their are in the world. This was a very counter intuitive and productive discovery.

Belief: The Engine That Runs Economies

The Yap are an island people who use limestone crafted currencies called fei. These are no ordinary, coin-purse sized rocks. Fei for large purchases can be taller than an NBA point-guard and wider than former U.S. president William Howard Taft (known for getting stuck in a bathtub due to his immense girth). To counteract the difficulty of transporting these fei between owners, the Yap devised a rather illogical scheme: they leave the fei in one place, and collectively acknowledge the new owner. We may be poised to search for the reasoning behind using these large, difficult to move limestones and, even more questionably, the act of redesignating rocks. However, we should inspect our own notion of money before jumping to conclusions about the Yap.

Whenever we play the famed board game Monopoly, we treat the currency with the face of Rich Uncle Pennybags as worth something, if only for a few hours. The participants of the game all agree that the paper money will be traded. Our palms sweat and hearts race whenever we near the Boardwalk space loaded with an enemy’s hotels, and our potential loss of our dear money looms. If we were to continue trying to use Monopoly money in the real world at Starbucks or for deposits in our Citibank accounts after the game was packed away, we would get many baffled stares and questions. Yet, this is exactly how we treat the imaginary currency we call U.S. dollars. We all agree it is worth something in the real world, as we do with Monopoly money during the game. The Yap agree that their fei are worth something. After a closer look, the mechanics of Monopoly, the U.S. currency system, and the Yap transactions may not differ ideologically after all. They all depend on the consensus that what we are trading has value.

Milton Friedman tells of an interesting story of the Yap in his essay “The Island of Stone Money.” The Germans, who were in possession of the island, wanted the Yap to build them roads so they painted black crosses on all of the fei and claimed them for Germany. The Yap, used to respecting claims of ownership, conceded and built the roads. This strikes us as odd, since the fei were not changed in intrinsic value, only in the sense that the Yap now viewed them as being worthless. If someone were to come up to us, take a dollar out of our hand, put a sticker of their face on it, then give it back to us, we would not regard it as theirs. We would, in most cases, remove the sticker and wonder why some lunatic just did that. Our belief over the value of that dollar would not be changed. However, our own history reveals an instance of our government acting in a way reminiscent of the Yap response to the Germans. In 1932, France asked the U.S. to change its dollar holdings to gold. The Federal Reserve allocated the specified amount into cabinets, labelling that the contents belonged to France. Just as the Germans did not physically gain anything by putting crosses on the fei, the French did not receive anything tangible through the cabinets and labels. Yet, the simple idea that a transaction had taken place was enough to convince everyone. The U.S. markets were sent into a panic, viewing the dollar as having grown weaker and the Franc stronger.

These actions, by our own country and by people in far removed places like Yap, highlight that all forms of money must be backed by the belief that the currency is worth something. If no one on Yap truly believed that the fei could be exchanged without moving it, a lot of energy would be spent rolling the baby-elephant sized rocks around the island. Since everyone is in consensus that goods and services can be bought by the mere acknowledgement that the fei has been given away, the economic way of life can continue to function. For a native example, if we were to somehow get a fei from Yap to America, roll it into Walmart and try to purchase a shopping cart full of groceries with it, we would be leaving empty handed (aside from our mysteriously obtained fei). Because we do not regard fei as having any monetary worth here, it could never be used to buy items. Dollars, on the other hand, have been agreed upon for decades as having purchasing power here. In and of themselves, they are just pieces of linen with no intrinsic worth, aside from kindling.

NPR’s broadcast detailing Brazil’s decades-long battle with inflation is a prime example of this notion. The creation and success of the URV, also known as the real, proves the ability for worthless materials to be assigned a value by a human collective. Nothing seemed to be solving the problem of inflation in Brazil, so four college professors decided to invent a new currency that they believed would solve the problem. Cruzeiros, the standard currency in Brazil, began being translated into URV values. The newspaper would print the reported exchange rate of cruzeiros to reals each day, and businesses would have to accept this new rate. The URV wasn’t even a physical object at this point; cruzeiros were still in use. However, the entire country began regarding this invented currency as based in reality, and these new values caused inflation to decrease. The economy of Brazil was turned around simply because of what people believed. The URV was not a pot of gold at the end of the rainbow that solved all of Brazil’s problems. Their savior was the idea that what they held in their hands had new worth, although nothing physically changed.

It is eye opening to realize that monetary systems throughout the world are based off of mere ideas and beliefs, rather than material objects that have true value. The dead act of bartering made sense: if you needed milk and your neighbor needed eggs, you would give him a chicken and he would give you a cow. Two physical objects with differing purposes changed hands, each benefitting the new owners in some way. Now, that system is long gone. Paper and linen currencies are the new norm throughout the world. If you need milk now, you bring a thin green rectangle with Abraham Lincoln’s face on it to the store. You receive milk, and the seller receives a small amount of purchasing power. With credit and debit cards, you receive milk, and the seller gets electronic information that states he is now slightly wealthier. The Yap receive something large, like a plot of land, and trade in an idea: that a rock now belongs to their trading partner. Admittedly, dollars do have value in our modern world, but certainly not in the way we think. If our wallet catches fire and we lose thousands of dollars in cash, worthwhile beliefs were just set ablaze, not anything physically valuable. If our dog chews all of our Monopoly money while we are taking a bathroom break, the only thing lost is our belief that we had in-game wealth. The beliefs that turned into ash or chewed up paper are that the money had value, and that it could be exchanged for what we desire.

Works Cited

Glass, Ira and Channa Joffe-Walt. “The Invention of Money | This American Life.” This American Life. WBEZ, 7 Jan. 2011. Web. 04 Sept. 2015

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