Stone Money – Fulcrum66

Posted on February 13, 2023 by fulcrum66

Is the Green Real

What really is that item we call money? Our lives seem to revolve around money with daily transactions occurring between each other. Exchanging something for a piece of paper or coins that have “Value.” People work every day and long hours to get a certain amount of money per hour to provide for themselves or family. A question I always ask myself is what if the money just disappeared? I believe we give money value in transactions for the purpose of equal medium, so nobody is short ended. 

After reading the article, “The Island of Stone Money” by Milton Friedman, it has shown me new light on what people call money. On the island of Yap, the people use decently large stones for their form of currency. Their island consists of no metals so quarrying stone was the only option. The rocks with value are called fei and are shaped like wheels. Transactions between the people of Yap happen when one person will bargain for something and will simply leave a mark on the rock to show the transaction had occurred. The original owner keeps the rock on the premises due to it being too inconvenient to move. The equal medium in this situation would be the markings on the rock. I feel though in this situation this would not work for our society because we would not view this as equal, and some people may feel short end. This transaction may seem like it would never happen here, but in fact it has. The bank of France didn’t want the U.S to change the gold standard so they asked the Federal Reserve to switch their assets into gold. Instead of sending a boat load of gold across the sea, the Federal Reserve went into the gold vault and simply moved the amount of gold the French wanted into a drawer. If you think about it the money the French had was never really there and the U.S technically lost money for it. This is where the similarities are drawn between this event and the people of Yap. A verbal transaction occurred but nothing was exchanged leading to no actual money being exchanged from one person to another. Even when we think about a huge rock for money and how ridiculous it is, we have to see how in our own system it’s truly not there and we only give it value for a medium of exchange. 

In the broadcast, “The Invention of Money” by NPR they shed light on how money is only an idea and really has no true value. In 1933 the U.S decided to use paper as a form of money instead of gold. In all they basically made something invaluable, valuable. Nowadays with banking online we do not physically see this money and it is only information. It is simply an idea for the banks to tell you that they have some amount of money, but you will never see this money, only believe in it. In 1990 Brazil was experiencing high levels of inflation and caused prices to rise from month to month. For decades people lived with 80% inflation and when grocery shopping, shoppers would try and race the price changers to get products at a somewhat reasonable price. The problem originated in the 1950s when the president at the time decided it would be a great idea to build a new city and they lacked funds for the city. To change the lack of funds they decided to just print a bunch of money causing the inflation problem. In the early stages of trying to combat this problem they tried to freeze the prices and make it illegal to raise prices. This in turn did not work and then they tried to make money not a thing and this also ultimately failed. Brazil turned to four economists to help solve this issue and had lots of pressure riding on them. They believed in attacking inflation at its true roots and turning off the printing press and creating virtual money. One of the main aspects to this plan was stabilizing the faith in the people that the money would work. After years of horrible inflation, the physical currency only caused more problems and by giving this virtual currency value it changed the country completely. In conclusion the economists found a perfect medium of transaction and resulted in a perfect system with no inflation. 

What if printing money to deflate the economy was actually valued for businesses to invest in their consumers. In the article, “The Curious Case of Japan’s Economic Stimulus” by Paul Krugman, it tells how Japan is valuing their money in a different way. Prime minister Shinzo Abe decided this was best for the economy of Japan and in fact it was and is currently doing better than the systems we developed. In 2009 there was supposed to be an economic catastrophe for Japan because of this, but instead interest rates rose and slowly dropped to the current rate of under one percent. Abe defied what we know and our current systems and created a huge value of money to invest in the value of businesses. By creating more valuable products to spend on this in turn created a better economy and also a great market for consumers with little to no inflation on products. Instead of only focusing on the medium of exchange the Japanese government focused on the businesses themselves and they in return grew for the economy.

I believe we give money value in transactions for the purpose of equal medium, so nobody is short ended. Money is different to all societies with other societies using other forms to show it or even the ideas behind. We all use some kind of representation of transactions, but I believe it is truly money when it is an equal medium of exchange. This idea of this number we own or work for isn’t really there and in order to find true value in our economy we use numbers and information to express it. 

References

Krugman, P., Kelly, K., Barclay, M. L., Luthra, S., Wilkins, B., Queally, J., Yerman, M. G., Kang, S., Zhang, S., Walker, C., & Corbett, J. (2013, January 22). The Curious Case of Japan’s Economic Stimulus. Truthout. Retrieved February 13, 2023, from https://truthout.org/articles/the-curious-case-of-japans-economic-stimulus/

“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)

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Stone Money – SayCheese

Posted on February 13, 2023 by saycheese03

“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)

Posted in SayCheese, Stone Money | Leave a comment

Stone Money – chickennugget246

Posted on February 13, 2023 by chickennugget246

Believe In It or Not

Over the course of history, civilizations have developed a means of monetary exchange in order to avoid having to barter directly for goods and services. Different nations in different regions developed their own mechanisms to do this. Some of this currency could come in the form of paper, stone, gold bars, or even come to them virtually. 

To begin, there was an island called Yap where 5,000 to 6,000 inhabitants had quite the unusual currency. They used large, stone wheels called fei as their means of exchange or what is now commonly referred to as money. This type of money was found on a completely different island approximately 400 miles away from Yap and then was brought to the island by courageous transporters. Although it was a unique way of conducting business, it was the monetary exchange known and used by the islanders.

For instance, in one stormy journey, one of these large rocks sank into the bottom of the water while it was being transported to its rightful owner. Despite the fact that it remained in the bottom of the water, it was still to be owned by the individual expecting it. That was the belief, the truth, and the perception.

Another time, there was a situation when the dirt paths on the island were in need of repairs. Those individuals that insisted on not contributing to the order were to be given a fine. Therefore, a man was sent out to every district that was not consenting and put a cross in black paint on the stones to demonstrate that the government claimed the money or exchange from them. It worked and the people finally conceded because this was the usual way that monetary business was conducted and accepted. Consequently, the government sent out groups to erase the black crosses since the fine was paid and all was settled.

Similarly, as Milton Friedman suggests in “The Island of Stone Money,” France and the United States had a situation where France wanted the Federal Reserve Bank of New York to convert their dollar assets into gold because France feared that the United States would not stick to the gold standard. Well, the Federal Reserve Bank did something just as the people in Yap did, it marked the drawers in the reserve that were property to France. This caused a huge banking panic in the United States and caused people to view the United States dollar as weak. Much like the Yap story, this was an accepted move and a customary belief that worked for the people of France.

What is similar between the France and Yap situation is that both examples show the need for the society to have pure faith within their currency system. The Yap people established faith in their belief of the stone currency and the hard work it took to establish the currency within their village. To them, it was tangible in their minds, it was labor intensive, it was real, and the work to get it was worth it. France received the assurance by getting the confirmation from the United States government that gold supported their monetary currency. Once trust in the monetary exchange is secured by a nation, island, or district, the people will believe in it and follow, as history suggests.

The need to have such belief or faith in your monetary system can also be displayed by what happened in Brazil. The prices in Brazil were going up every day and inflation was skyrocketing. They lost faith, suffered from major inflation, and did not have confidence in their medium of exchange. In 1950, the president of Brazil wanted to build a new massive city that would cost a lot of money but the government did not have it. So, to afford this dream, the government printed the money, created it, but the problem would be massive inflation. This lasted decades in Brazil and money was worth a fraction of its true value. This was a major political issue in Brazil and the presidents failed – every time. Finally, four heroes that taught graduate school were invited to come to Brazil in 1993 with their ideas to help Brazil and their economic struggles. They thought Brazil had to stop creating money so quickly and stabilize the people’s faith in money. They knew they needed to change the people themselves because the people were the main problem. So, they developed a plan for new currency, a virtual currency, which is what they called it. The Unit of Real Value or the URV was a local currency that allowed people to still keep the current currency in their pocket but paid everything else in the URV, even their taxes. The four heroes implemented this innovative exchange and explained to the country about this virtual currency. The people used it, got accustomed to it, had faith in it, believed in it, and it worked. Inflation in Brazil decreased, prices were much better, and eventually the new currency was accustomed and developed and real to the Brazilians. They had trust in it and their perception of the worth of it carried the values of the monetary currency. Brazil is the 8th largest economy now and their money is certainly worth something now, as they continue to believe this. 

As we look into the future and see the technological advances of monetary exchange systems, we arrive at bitcoins. The same concept applies as discussed earlier in this article. The problem with bitcoin is, it is not supported by any centralized bank and the value of bitcoin can change in a short period of time. The article suggests that something could be a value of $360 at the beginning of the day and only a $85 value at the end of the day. In addition, Jeff Reeves notes in, “Opinion: Bitcoin has no place in your – or any – portfolio,” that a bitcoin is worth what any given person on any given day is willing to pay. Although there may not be any fees in bitcoin as there are in a credit card transaction, having a system where the true value of the bitcoin is not stable, is not a reliable means of currency at the present time. Although there is a potential for the use of bitcoin in the future, if these issues are not corrected, it will not be effective because it will not be reliable. Actually, the stone currency used by the people in Yap was much more reliable than the use of bitcoins because with the stones, the villagers knew the value of their products based on the stones that they used. Bitcoins have not yet achieved that level of faith and positive perceptions needed to be a useful form of currency. 

As you can see from the above stated examples, the crux of the matter is that a monetary exchange system must have the faith and belief in it by the members of the society that uses it. Once such faith and perception is lost in the system, problems occur such as inflation, the value of money declines, and chaos in a nation or on an island erupts. Exactly what occurred in the Yap community through the use of the stones, what the four heroes were able to establish in Brazil, and what France needed from the United States by creating the gold standard, all had one thing in common. They all, collectively, needed to keep faith and perception of validity in the monetary exchange system. They needed to – believe in it or not.

References

Friedman, M. “The Island of Stone Money.” Hoover Institution, Stanford University 1991. miltonfriedman.hoover.org

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

Reeves, J. “Opinion: Bitcoin has no place in your – or any – portfolio.” marketwatch.com. 31Jan.2015. marketwatch.com

Posted in ChickenNugget, Stone Money | 4 Comments

Stone Money- Pinkmonkey32

Posted on February 13, 2023 by pinkmonkey32

Why Trust Money?

What is the real value of money? Honestly, almost nothing. In early ages people trusted and founded currency off of the gold standard but as time went on we switched from precious gold to dirty paper, Yet for some reason we still believe that these pieces of paper are actually equivalent to a certain amount of gold.

All this leaves us to question why we see value in this money when really the only value it has is what we give it. In the podcast by YAP from the planet money team, they speak about money and this exact concept that the dollar only has the value we give it.

The podcast from the planet money team spoke about the Brazilian government and their stone money. Essentially in Brazil they had these giant stones that would just stay in place and when you had to use your stone to buy a big purchase like a warrior who is being held you would pay for it with your stone. The stone however did not move and stayed in the same spot, only now someone else owned it. There is even one of these stones at the bottom of the ocean that still was used to purchase things and held its same value. This Currency however did not last and Brazil went into a mass depression where they could not keep inflation down.

This depression is also addressed during the podcast. A Brazilian woman shared stories on the podcast about how the prices at the market would change from morning to afternoon so you’d have to go and beat the sticker man to get the cheaper price for the product. She explained how as soon as people got paid they would rush to buy food before the prices increased yet again. Brazil couldn’t figure out how to stop inflation and asked these Americans who had studied the Brazilian currency and had a plan to fix the government to come and help. Essentially what their plan was, was to give out virtual currency and the virtual currency prices would be lower than if you paid with standard currency, eventually making it overtime switch the virtual currency with no inflation. This idea actually worked and helped Brazil climb out of their depression, but this new virtual money had absolutely no value, the people just believed it did.

America did the same thing, switching out of the gold standard to paper money. The only issue is the US Treasury can decide at any point that they want to drain money or add money into circulation. With the press of a button billions of dollars can just be made up out of nowhere and given to the banks to help calm the market. The issue with this is illustrated perfectly in the 2008 market crash.

The 2008 market crash was devastating to most. In the article “the fall of the market in 2008” by Paul Kosakowski he claims,”This period ranks among the most devastating in U.S. financial market history. Those who lived through these events will likely never forget the turmoil.” During this crash people who had all this money or so thought they lost it over night. Million dollar properties lost insane amounts of value in just one night. People were broke, people struggled, and even died. This harsh time was “relieved” so to speak by the US Treasury and there tax breaks and stimulus packages, making this a perfect example of just making money whenever they deem necessary as well as a great example with tax breaks posing the question if we could cut them short for a break why can’t they just be that low all the time.

With both of these examples we see that people are so willing to trust these currencies that in actuality have no real value. Why did we give up our gold to the banks in exchange for dollar bills, and even worse than that we are starting to switch to virtual currency more and more everyday. People are trading in cash in their hand for numbers in their bank accounts. With venmo, credit cards, debit cards, and even bitcoin were putting more and more value on a number on your screen. In the article “The Cashless Future is Here. So is Big Brother” by Daniel de Vise he claims that,” three-fifths of consumers told Gallup they used cash only on occasion last year, twice the share of five years ago.” Now our government and treasury are looking to see if moving cashless is the best idea and if we will benefit from it, some believe we will and some believe we won’t.

In conclusion, we have seen multiple countries including out own switch out their currency and fix their market and tame inflation, but is switching to strictly online currency the right move? This idea poses even deeper questions like has the government already started and we just don’t know, and is that why when you go to take YOUR MONEY out of the bank they don’t always have the amount you’re asking for. Where is our money going? Why is cash being used less and less? Are we going to see a cashless society? Will other countries follow? These are all questions that we should be looking deeper into and figuring out why we so easily believe the fake value of our currency.

References

Kosawski, Paul, The Fall of the Market in the fall of 2008 https://www.investopedia.com/articles/economics/09/subprime-market-2008.asp

De Vise, Daniel, The Cashless Future is Here. So is Big Brother https://thehill.com/changing-america/enrichment/arts-culture/3799088-the-cashless-future-is-here-so-is-big-brother/

Yap, This is American Life https://www.thisamericanlife.org/423/the-invention-of-money

Posted in PinkMonkey, Stone Money | 1 Comment

stone money-pinkheart84

Posted on February 13, 2023 by pinkheart84

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

Posted in PinkHeart, Stone Money | 1 Comment

Stone Money – GracchusBabeuf

Posted on February 13, 2023 by gracchusbabeuf

The Making of Money

Money, it is said, makes the world go round. Its influence over the daily life of the modern capitalist subject is immense and totalizing. While far from a recent development, many of our ancestors hardly interacted with the monetary economy at all. For a modern subject, the largely moneyless lives of subsistence farming peasant only a few hundred years ago seems as distant and alien as a Martian colony in a work of science fiction. Yet, even when removed from the recognizable physical representations of money, the concept of what something is “worth” persists. Twenty yards of linen is equal to one coat, one coat is equal to so many sacks of potatoes, and so on. From this, the value of a commodity can be broken down further into two component parts: its use-value and its exchange-value. A coat is valuable because it keeps us warm, this is its use. That same coat also has an abstracted value relative to what it can be exchanged for, based on the labor time and materials invested in the production of the coat. We know that the coat is valuable because it required so many feet of linen and so much labor time to create. This coat can then be exchanged on the market, according to political economist Karl Marx, because it and all other commodities are related to abstracted human labor, the equivalent form of commodities. 

Where does money enter into the equation of exchange? Money is, also according to Marx, the commodity chosen as the universal equivalent of exchange. It “transubstantiates”, as he often puts it, the use-value of a good into its exchange-value. It takes the place of human labor as the abstract understanding of what commodities are worth. The specific form that money takes is an accident of historical development. In the societies of the old world, for example, gold and silver developed as the acceptable representation of Money. From Ireland to China, a merchant could be sure that a pound of gold would be, literally, worth it’s weight in gold. However, as Milton Friedman’s paper “The Island of Stone Money” demonstrates, who is to say that gold and silver really have value?

For the islanders of Yap, a remote Micronesian society of a few thousand people, Money existed in the form of large, circular disks of limestone. As Friedman admits, he first thought that these people were “silly” and “illogical” for treating giant stones as valuable currency. On further reflection, the example of the Yap islander revealed to him the counterintuitive nature the money-form. The bank vaults of gold and silver that were once the standards of international trade were no more real than these gigantic stones on the side of the road. Both had value because it was something everyone agreed was valuable. Diverging from Friedman’s observations to make my own, we can see the islanders use the stones in exactly the same way gold and silver was used. Need to make a dowry? Simply mark off that ownership of one of your giant rocks has been transferred to the other family. So long as everyone agrees that this is the universal commodity for exchange, it can fulfill its purpose even if it seems to be silly to us at first. For one of these islanders, our paper currency would have elicited similar responses to Friedman’s initial thoughts. Money is a social invention that can only stand in for abstract labor as long as people believe that it is worth what we say it is. Otherwise, it will lead to a legitimacy crisis for money, where its perceived, and therefore real value constantly fluctuates.

Episode 423 of the radio program “This American Life”, “The Invention of Money”, offers a look into what happens when money loses its value. The second section of the program details the inflation crisis in Brazil during the 20th century which saw decades of crippling price rises, and how a team of economist devised a plan which fixed it in an unprecedented way. As the program details, the Brazilian government, to finance its building of a new capital for the country, printed large amounts of money to fund the project. While every central bank can increase the money supply, it carries risks when done too quickly. As Chana Joffe-Walt explains in the program, “If there’s say, a hundred dollars in the economy, you create a hundred more, now every dollar is worth half as much. That’s inflation.” This process of inflation is exactly what the president had started when building this new capital in the 1950s. From there, the Brazilian government continued to print money to finance itself, which in turn depreciated the value of its currency even more. As described in the program, the inflation rate reached levels as high as 80% a month.

To solve this crisis, the government eventually enlisted the help of four Brazilian economists. Their plan was almost unbelievable: they proposed the creation of a new currency, the URV. The URV, unlike a normal currency, would not be printed. It would exist only as a legal fiction. However, it was a necessary tool to convince a population that their money had value, even when all of their experience in the previous 4 decades told them otherwise. The trick was to get people to think in terms of URVs rather than in the local currency. Payroll, taxes, and prices were all listed in URV, with the central bank publishing an official conversion rate every day. Despite the URV literally not physically existing anywhere, this scheme worked. After the population became used to the URV, the final part of the plan was implemented. Overnight, a new currency was shipped out to banks all across the county. It was worth one URV and one US dollar. The old currency had been supplanted in the minds of the population by the URV, so when the time came to replace the real day-to-day currency, it was a natural transition since it was pegged to the trust URV. Which, I cannot stress enough, did not physically exist anywhere!

The case of the Brazilian inflation miracle ties back to the theories of what money actually is: a delicate feat of societal engineering that serves as a universal equivalent for the exchange of commodities. It is the mystifying abstraction of human labor that facilities the trade of goods and services. I can sell my hat for 30 dollars and use that money to purchase food without the need for someone to want to trade food for my hat. Money, when understood as a technologic instrument, become comprehensible. It is not magic, but a tool which develops accidentally in history to facilitate exchange. However, with substantial effort and clever policy, it can be invented deliberately, so long as everyone believes in it. In this way, money is a secular religion; separate from the use-value of commodities. It derives its value as a commodity from belief rather than any unabstracted utility. A coin has no significant use if it cannot be exchanged; a coat can keep us warm even if we cannot trade it.

References

Friedman, Milton. “The Island of Stone Money”. Stanford, 1991.

Glass, Ira. “Episode 423: The Invention of Money. This American Life. Chicago, 2011.

Marx, Karl. Capital: A Critique of Political Economy. Vol. 1. Trans. Ben Fowkes. New York: Penguin, 1990

Posted in GracchusBabeuf, Stone Money | 1 Comment

White Paper – Anonymous123

Posted on February 13, 2023 by anonymous123

Hypothesis

Pre-game rituals for athletes will overall improve the way you will perform.

References

  1. “Integrating pre-game rituals and pre-performance routines in a culture-specific context: Implications for sport psychology consultancy“

Background: The articles goes over how superstitious rituals can optimize performance as they also use psychology consultancy to assess players and their rituals.

How I intend to use it: This article will help me gain some basic research of the phycology behind having rituals and just the overall concept of having a pre game ritual.

2. “Useful tips to avoid Performance Anxiety“

Background: Anxiety is a big thing in sports when it comes to playing games or maybe even practicing. There are ways to calm your anxiety and to focus your self and one of those way is a pre game ritual.

How I intend to use it: I intend to use this article to show my readers that rituals have other purposes than just to look cool. Rituals can calm you down and make you more locked in and focused at the task at hand and not worrying about anything else or what could go wrong.

3. “Implicit Religion and the Use of Prayer in Sport“

Background: It goes over how prayer in sport is typically a big ritual for some players, and when you sport related pray it is mainly to help you succeed and performance enhancement.

How I intend to use it: I intend to use this by showing my readers that prayer is a way for some players to seek performance enhancement in their game or even pray for a big win, which overall encourages them.

4. “Superstitious Behaviour in Sportspersons in Relation to Their Performance at Intercollegiate Level“

Background: They got together with athletes to analyze and and test if pre game rituals have an actual affect on performance.

How I intend to use it: This article uses experiences from actual; athletes describing how they feel after pre game rituals and why they do it.

5. Sports, Psychology, and Superstition

Background: This article goes over the psychological factors that affect a players performance and goes over how rituals play a part in all of them.

How I intend to use it: I intend to use this article as a way to show my readers that rituals do play on different factors such as emotions, motivation, confidence, intensity and focus. All which will affect a players performance.

Posted in Anonymous123, White Paper | 1 Comment

Stone Money — Shazammm

Posted on February 13, 2023 by Samantha Szumloz

The Lies Behind The Dollar Sign

I can say with strong conviction that our perception of money is influenced immensely by culture and the natural environment in which we live. Since there are varying societies and places in the world, monetary systems are bound to be different from one another. According to Milton Friedman’s work The Island of Stone Money, he uses the account of William Henry Furness III to describe the Yap people’s subject of payment, which are large stone wheels known as “fei.” Friedman additionally mentions France’s use of gold and the U.S. ‘s use of paper cash for currency, calling to mind the differences between each nation’s monetary system. However, despite the distinctions between these financial structures, they all lead me to the same universal standpoint about money: it is a man-made illusion. Money is not real because it is merely an idea that people throughout history have rethought over-and-over again. It only seems real to us because we use physical objects like stone, gold, and paper to symbolize currency. No ruler or supreme being ever told us that these resources are high in value. Yet, we humans have chosen these things to be our precious goods. That is why wealth is becoming unimportant. If the concept of money is fiction, so is wealth. The more people realize this, the less desire they have for material possession.  

Prior to reading The Island of Stone Money and listening to the NPR broadcast The Invention of Money, I did not think much about the concept of currency. To be frank, I never questioned the idea. I merely perceived money as something priceless, tangible, and as real as the earth we walk on. Now, after analyzing it globally, my attitude toward the subject has changed. Firstly, not only is money an illusion, but it can turn the wealthiest countries in the world into impoverished nations with ease, putting innocent citizens in vulnerable positions like lack of education, food insecurity, and unemployment. Unfortunately, the effects of losing money are painfully real. Take Japan’s economic system, for example. In The New York Times 2013 opinion editorial “Japan’s Latest Economic Transfusion,” Japan’s Prime Minister Shinzo Abe was relying on his new $16 million stimulus package to boost his economy and position in the upcoming elections, even though it was putting his government more in debt. What troubled me about this so-called stimulus package is that it was a double-edged sword, a financial plan that came with consequences. Indeed, it had the potential to create new jobs for Japanese citizens and expand health care spending. But only for a short period of time, which is not enough time for a country. Not to mention it was beating more money out of the already-bankrupt government. What saddened me the most about Japan’s situation is that they depend immensely on money to be deemed one of the wealthiest countries in the world, even though money is actually a falsehood. So was the stimulus package worth it in the long run? I would have to say no.  

The second observation I made about money after reading and listening to the article and broadcast is that anything can be used as currency. For instance, in the “Prologue” of the NPR broadcast The Invention of Money, Ira Glass and the Planet Money team informed their audience about the Yap people’s use of large stones as payment. Before, I merely imagined money as paper cash because that is my country’s form of currency. I never imagined money in any other form. So the way I physically see money has changed. I can also come to the conclusion that money can easily be converted into something different to fit the financial customs of other societies, places, etc. Since money at its heart is fiction, we can alter it at any point in time. In The Island of Stone Money, Friedman recalled how in 1932-33, the Federal Reserve Bank converted dollars into gold for the Bank of France to quell their fears about the U.S. not following the “gold standard.” After reading this section of the article, I could not help but think that money’s role is more than just paying for necessities. It allows us to communicate with people unlike ourselves and trade services with them. As counterintuitive as it sounds, without money, nations would not survive on the world map, for they would be left on their own. 

Finally, the last observation I made about money after doing my research is that it can create distrust between governments and their citizens. In act one {“The Lie That Saved Brazil”} of the NPR broadcast The Invention of Money, Brazil’s government was unable to persuade people that their money was valuable due to the rapid rise of inflation. When citizens are living in an environment where prices are constantly increasing drastically, and they cannot seem to catch up with the skyrocketing charges, they are bound to question the worth of their money and, eventually, the people regulating their economy. It makes total sense. If I were in their shoes, I would have felt the same way about my money and the economy. Why would I put my faith and trust in an imbalanced monetary system?       

In conclusion, money, no matter how much stress it causes our world, is a necessity. We have depended on it for centuries, and we will continue to depend on it because it is the only thing we know that will keep us from becoming poor. The bottom line is that money comes with consequences that are either good or bad. The more money you have, the better off you will be. The less money you have, you will physically and emotionally suffer. It is a cruel rule we have in our world. However, the positive aspect of it is that we have the power to make changes to that rule. If we can create monetary systems and change them for others, we can change them for ourselves. We just have to think outside the box. 

References

Friedman, M., Leeson, R., & Palm, C. G. {1991}. The island of stone money. Money Mischief, 3-7, https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full 

{2013}. Japan’s latest economic transfusion. The New York Times. p 22 in print, https://www.nytimes.com/2013/01/14/opinion/japans-latest-economic-transfusion.html 

Glass, I., Joffe-Walt, C., Kestenbaum, D., Blumberg, A., Planet Money {2011}. The invention of money. This American Life, NPR, https://www.thisamericanlife.org/423/the-invention-of-money

Posted in Shazammm, Stone Money | 4 Comments

Stone Money – philsfan1133

Posted on February 13, 2023 by Jacob Pasquale

Concept of Money

To understand the absurdity of money, it is essential to examine its origins and evolution. Throughout history, various forms of currency have been used, from bartering to precious metals like gold and silver, and even large stone wheels as seen on the Island of Yap in the Pacific. These forms of currency serve as examples of how the value of money is not inherent; instead, it is placed on it by society. The significance of money lies in its widespread acceptance as a medium of exchange, without which trade and commerce would be severely impacted.

The investigation of money as a notion requires a deep dive into the annals of currency forms and subsequent comparison to our current currency systems. One particular instance of a unique currency system is depicted in Milton Friedman’s seminal work “The Island of Stone Money”. The island of Yap, where this monetary system existed, relied on large stone discs known as fei as their primary medium of exchange. These fei could range in size from a modest one foot in diameter to a towering twelve feet, posing a daunting challenge in terms of the feasibility of tracking ownership and transfer of these massive stones. The absurdity of this currency system does not end there. Upon being traded or exchanged, the fei would remain on the property of the new owner, who would simply acknowledge and respect their newfound ownership of the stone without the need to physically move it. This peculiar system of currency serves as a catalyst for introspection into the nature of money and whether our own design is any less absurd. Is it not true that money, like the fei, is merely a representation of value and ownership that we acknowledge and respect in our minds, without physically moving it around? This realization opens the door to rethinking our current monetary system and exploring alternative forms of currency.

The NPR Broadcast recently shed light on a fascinating topic concerning inflation in Brazil. Upon closer examination, the notion of inflation appears to defy logical explanation. The arbitrary fluctuation in the value of the currency, with a thousand dollars being worth significantly less the very next day, is a concerning prospect. This is further compounded by the simultaneous rise in the prices of goods, creating a vicious cycle of economic instability. Brazil has tried numerous methods to combat inflation, but these efforts only led to further erosion of trust in the government and, in some cases, even resulted in tragic instances of suicide. In a last-ditch effort to resolve the issue, the Brazilian government sought the help of four economists who presented a revolutionary plan. This plan revolved around the implementation of URV, a fictional virtual currency that effectively put an end to inflation in Brazil. This raises the intriguing question of whether money is merely a fanciful construct, as we seem to have the ability to fabricate any form of currency to resolve economic dilemmas.

Adding onto the NPR Broadcast shed light on the fact that the concept of money, which we commonly associate with tangible currency, has become increasingly abstract and virtual. With the proliferation of digital banking and online payment systems, it is increasingly rare for individuals to actually handle physical cash. Payments are made through the transfer of numerical values in one’s bank account, rather than physical bills or coins. This raises the question of whether money, in its present form, can be considered a tangible or real entity. Instead, it appears to be merely a collection of numerical data on a screen, only imbued with significance due to our collective belief and reliance on it as a means of exchange. The true nature and value of money are thus brought into question, as it relies on our perception and interpretation to maintain its importance.

The concept of Bitcoin, as described by Anne Renaut in her article “The bubble bursts on e-currency Bitcoin,” is indeed a captivating subject that deserves closer examination. Bitcoin was created in 2009 with the intention of being a currency independent of traditional financial institutions and banks. This was a revolutionary idea at the time, as it was the first time that someone had attempted to create their own currency without the backing of any central authority. However, this has also led to criticism and skepticism about the legitimacy and viability of Bitcoin as a currency. Some have questioned the morality of creating a currency outside the traditional system and the potential consequences that come with it. It’s important to note, however, that all forms of currency have been created by individuals, even the dollar bill that we use in our current monetary system. Currency has always been an ever-evolving concept that reflects the changing needs and values of society. The creation of Bitcoin was no different, as it was an attempt to address some of the shortcomings of traditional currencies and financial institutions. Despite its innovative nature, Bitcoin has faced criticism due to its association with illegal activities such as drug trafficking and money laundering, facilitated by the high degree of anonymity it offers. This has raised further questions about its viability as a currency and the ability to regulate it to prevent such issues. The fact is, currency has always been used for both legal and illegal purposes, and it’s up to society to determine what is acceptable and what is not.

Reflecting on the evolution of various forms of currency and their origins prompts us to contemplate the essence and purpose of money. It is a curious phenomenon that money holds little intrinsic value, yet it retains immense significance due to our collective perception and attachment to it. The notion of money is, in essence, paradoxical and raises questions about its eventual obsolescence. The physical manifestation of money, once represented by massive stones, has been largely replaced by digital currency stored in plastic cards, resulting in a shift towards a more intangible and virtual form of currency. This prompts the question of what will come after digital money, and whether the concept of money itself will eventually become redundant. Given the increasingly absurd nature of the current monetary system, it is not beyond the realm of possibility that this will come to pass.

References

Friedman, M. (n.d.). 1991 island stone money – hoover institution. Retrieved February 10, 2023, from https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full

Renaut, A. (2013, April 13). The bubble bursts on e-currency bitcoin. Yahoo! News. Retrieved February 10, 2023, from https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html

423: The invention of money. This American Life. (2017, December 14). Retrieved February 10, 2023, from https://www.thisamericanlife.org/423/transcript

Posted in PhilsFan, Stone Money | 2 Comments

Stone Money – Giants19

Posted on February 13, 2023 by giants19

The Illusion of Money

Is money even real? Things that at first may seem like stupid questions are often times not always as black and white as they seem. Money is something that everybody knows exists. Everybody has seen it, everybody has held it, everybody has spent it, and everybody has earned it. In that context, it is real. However, did you ever stop to think who decided how much a dollar is worth? What happens if a large group of people comes to the consensus that the dollar is worth significantly more, or significantly less, than what everybody else thinks it is worth? I suppose a better question may be “is the idea that money has a shared value real?” Who decides what is worth what, and why do people go along with it?

In the NPR podcast “The Invention of Money” by Milton Friedman they discuss the history of currency. The first story they discussed, in the prologue, was about the ancient currency of the Island of Yap. In ancient Yap, they used massive stone wheels, that they called coins, as a form of currency. This was interesting to me, because they sort of picked something that is naturally occurring in nature as their currency. What makes it worth anything, the thing that separates these massive stones from any other regular rock, is that they are carved into these massive wheels. So it is the labor that is taken upon the currency that creates its value. Another thing I found interesting about the stone currency was that they were never actually given to the people who owned them, as it would be quite impractical to move something of that scale that far. Instead, the currency stays in one place at all times, and the only distinction between owning it and not owning it is by word. So, if, lets say, you were to try to buy a horse. The man with the horse wants one stone. You would merely say to the man, “Okay, you can have my stone for your horse.” and that would be considered a finalized transaction. Nobody needed to physically own the stone in order for it to be considered their money. A quote made on NPR really highlighted why this is so stupid to me. “Value isn’t permanent; it can disappear”. If this sounds like such a foreign and alien concept, then how come we do the same exact thing with the digital currency that western civilizations seem to be so enthralled with. You don’t feel that money, and you can not see it. It is not even a tangible object, yet is accepted as a common form of currency.

The following article, “The Island of Stone Money” tells the same story as in the NPR podcast, but this time, from a more familiar point of view. The article points out that the now-considered archaic concept of valuating currency based on word is actually something that we do all the time. This article also discussed the fact that it is not always necessary to be in possession of the stones, as sometimes word of mouth is enough to transfer currency. They also relate the “Island of Stone Money” to an event that occurred in the earlier part of the 20th century. In 1933, the country of France was concerned that the United States would not adhere to the standard price of $20.67 an ounce, and the value would go down. As a result, they had all of their cash converted to gold, and asked them to store the gold in their bank account and mark all of their gold as theirs. As a result, the French made a ton of money and the U.S lost a ton of money. The point is that in both scenarios, the stone money and the French conversion, their money was only as good as people told them it was. “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.” This illustrates just how much personal thought and opinion goes into what makes currency valuable.

Finally, the last article that I read was “the bubble bursts on e-currency bitcoin” by Anne Renaut. The article begins by discussing the supposed crashing of Bitcoin. They talk about how it rose to an astronomical amount and then crashed into nothing. In hindsight, this is pretty hilarious because we now know that Bitcoin would have an even astronomically more enormous surge than the one talked about in this article, and as a result, an even bigger crash (For reference, the article was written in 2013). “The price of the virtual “geek” currency had soared through the stratosphere in recent weeks, trading for a high of $266 on Wednesday”. Bitcoin reached an all-time high of $67,566 in 2021, and as it is now in 2023, is worth $21,810. As a result, the article serves as a time capsule representative of the fact that it does not matter who thinks what is worth what. It doesn’t matter what analyst thinks will be the next big thing, or the next big flop. The market simply does not care. We can tie this into the two previous sources because they all share a common theme. The theme being that the value of money can change at the drop of a hat, and no value is guaranteed. Certain investors of bitcoin spent pocket change, and as a result, became millionaires. You think they would have been regarded as financial geniuses when they invested? No, the same way somebody who invests in an unheard of crypto today would be looked at as a fool. The truth is, its easy to look back and say that those people were geniuses, but they could have easily just as well looked as stupid as the people investing in failed crypto today.

To conclude, the three stories all tell a very similar story. The value of money is never guaranteed. Perhaps calling the concept of stone money barbaric is calling the kettle black, because the system of digital currency that is very prevalent today is quite similar to the way that those stone wheels were used as currency. To sum it up, money is only ever worth what the people decide it is worth.

References

“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)

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/ 

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