In Money We Trust?
Many nations are built on and around the economy. Everything we do in life essentially is to reach the goal of making money. We try to do well in high school to get into college. We go to college to get a degree. We get a degree to get a job. Then, we get a job in order to make money. I usually saw money as a way to get and purchase things. However, I have never thought of money in much more complex ways until reading and listening to multiple sources about it. For this paper, I have reviewed Milton Friedman’s article titled “Island of Stone Money”, an NPR broadcast called “The Invention of Money”, and a 4-minute conversation between David Kestenbaum and Jacob Goldstein titled “The Island of Stone Money.” Value was a common term that was brought up a lot in these discussions about money.
It seems a bit counterintuitive that we associate money as value when in reality money itself isn’t value, but instead just holds it. The value money holds honestly relies on basis of trust that people have in it. Take Brazil and the Island of Yap as examples, which I will explain more in-depth later. The thought that money itself is “fiction” can be a feasible idea when you really dig into it.
To start off, during the four-minute conversation I listened to in an NPR broadcast produced by Planet Money, David Kestenbaum and Jacob Goldstein tackle the question of what is money by discussing the island of yap and their form of currency. When on the island of yap there is one thing that stands out. They are these big round stones that have become a staple of the island. These stones that weigh tons were formed by limestone and brought in from a distant location by the people of yap on a boat. During the conversation, one of the men brings up that, “the people of Yap took the thing they had that was pretty — their version of gold — and decided that was money.” Well, in this case, the people of Yap decided that their form of money would be these large round stones.
Agreement and acknowledgment are a big part of what gives money value. For example, shared both in the 4 minute NPR broadcast and Friedman’s article, a person of yap owned a fei that was very valuable but it couldn’t be seen or obtained because it was believed to be at the bottom of the sea. Although they can’t see the said stone the people of yap acknowledged and agreed upon the fact that someone owns it and it has value. This goes to show that money and value is about the mindset people have on. it.
The people of yap also didn’t exchange/trade their feis/stones as they were usually too heavy to transport. Therefore, the ownership of their money would just change from person to person. In Friedman’s article the story of the stone money can be compared to France’s gold story. France bought gold from the U.S and instead of transporting large amounts of gold to France the U.S kept the physical gold and just acknowleged the ownership of the gold as belonging to the bank of France. This was possible due to trust and agreement.
This is also not too different from the banking systems we have now. For example, when paying bills the money in our checking and or savings accounts just get transferred and no physical money is actually being handed out to companies. As Ira Glass said, “numbers going back and forth.” This is discussed more in the NPR Broadcast, “The Invention of Money”.
In the NPR broadcast titled “The Invention of Money” produced by Planet Money, multiple people who are invested in economics discuss the credibility of money itself. In act one of the broadcast, Chana Joffee-Walt talks with people who are well aware of the economy in Brazil. Brazil went through a major financial crisis around 1990. Inflation was at a high and the value of their currency, which was cruzeiros at the time, was low and decreasing by the day. This was because Brazil was making more money for projects and as a result more money really just meant less value in money. Fortunately, they were able to create solution. One in which people had to put trust into a system known as the URV, which people were able to depend on. This leads into act two where several people talk about how creating more money has its pros and cons.
In the second act of the broadcast, a few people, most notably Alex Blumburg and David Kestenbaum, talked about the Federal Reserve, our central bank. The Federal Reserve has a lot of power in terms of the economy. Odds are the Federal Reserve owns something that you know of in every part of the region. However mostly importantly, “The Federal Reserve can create money any time it wants.” Ira Glass states and that’s exactly what they did. New money was being made as a way to help failing companies. However, if they aren’t careful the U.S could end up just like Brazil, with a big inflation problem. It is also important to note that the banking system in America was crucial. It is the way new money is integrated into the world. In the United States, our currency is classified in dollars. However, that doesn’t mean it’ll always come in physical form. Our money that lies in the bank aren’t physically in our hands, but that does not make them any less real.
After going through these three sources I have gained a new understanding of money. I no longer believe money to just be a physical thing or object you trade for other things. There is value to it because we chose to impose it as such. To flat out and say it as it is, money is just a concept and value is based on the mindset we have on it.
References
423: The invention of money. This American Life. (2017, December 14). Retrieved February 14, 2022, from https://www.thisamericanlife.org/423/transcript https://www.thisamericanlife.org/423/transcript
Goldstein, J., & Kestenbaum, D. (2010, December 10). The island of Stone Money. NPR. Retrieved February 14, 2022, from https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money
Island of stone money: Milton Friedman: Free download, Borrow, and streaming. Internet Archive. (1991, February 1). Retrieved February 14, 2022, from https://archive.org/details/IslandOfStoneMoney/page/n1/mode/2up?view=theater https://archive.org/details/IslandOfStoneMoney/page/n1/mode/2up?view=theater https://www.hoover.org/library-archives/collections/online-collections-graphic-materials/workingpapers/getWorkingPaper.php?filename=E-91-3.pdf
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Counterintuitive Fall 2022 
Wanda, I’m going to do a “drive-by” feedback pass at this essay as a preliminary step, reacting to a few things that catch my eye and ear as I scan it. You can decide for yourself what you’d like to know more about.
Paragraph 1. Many nations are built on and around the economy. Everything we do in life essentially is to reach the goal of making money. We try to do well in high school to get into college. We go to college to get a degree. We get a degree to get a job. Then, we get a job in order to make money. I usually saw money as a way to get and purchase things. However, I have never thought of money in much more complex ways until reading and listening to multiple sources about it. For this paper, I have reviewed Milton Friedman’s article titled “Island of Stone Money”, an NPR broadcast called “The Invention of Money”, and a 4-minute conversation between David Kestenbaum and Jacob Goldstein titled “The Island of Stone Money.” Value was a common term that was brought up a lot in these discussions about money.
—FEEDBACK. Let’s try to imagine a general reader, not a member of this class, as your target audience. She doesn’t need a rundown of your sources or a description of your process. What she needs at the top of the page is an arresting detail, fact, concept, that will convince her to read your second paragraph. You establish the value of money to “us” by describing it as the motivation for everything we do. If after confirming that basic fact you told your reader that we’re chasing an illusion, or that our lives are based on a big lie, you might get a lot more traction than by saying, “value was a common term” in discussions of money.
Paragraph 2. It seems a bit counterintuitive that we associate money as value when in reality money itself isn’t value, but instead just holds it. The value money holds honestly relies on basis of trust that people have in it. Take Brazil and the Island of Yap as examples, which I will explain more in-depth later. The thought that money itself is “fiction” can be a feasible idea when you really dig into it.
—FEEDBACK. Without describing the Brazilian and Yap situations at all, you can’t expect your reader to understand their relevance. This will be the second time you said that you have gained information (but kept it to yourself) instead of sharing it with your readers. You shouldn’t tease. Readers need rewards, not promises, to continue reading. Your paragraph is extremely abstract and needs some cows and chips. You describe money with reference to abstractions: value, holder-of-value, dependent on trust, fictional, but we have no idea why they should be of concern to us. Will my money still spend?
Paragraph 3. To start off, during the four-minute conversation I listened to in an NPR broadcast produced by Planet Money, David Kestenbaum and Jacob Goldstein tackle the question of what is money by discussing the island of yap and their form of currency. When on the island of yap there is one thing that stands out. They are these big round stones that have become a staple of the island. These stones that weigh tons were formed by limestone and brought in from a distant location by the people of yap on a boat. During the conversation, one of the men brings up that, “the people of Yap took the thing they had that was pretty — their version of gold — and decided that was money.” Well, in this case, the people of Yap decided that their form of money would be these large round stones.
—FEEDBACK. May I demonstrate?:
That’s it. That’s your whole paragraph. Here’s how to deploy those big stones to help your readers care.
Paragraph 4. Agreement and acknowledgment are a big part of what gives money value. For example, shared both in the 4 minute NPR broadcast and Friedman’s article, a person of yap owned a fei that was very valuable but it couldn’t be seen or obtained because it was believed to be at the bottom of the sea. Although they can’t see the said stone the people of yap acknowledged and agreed upon the fact that someone owns it and it has value. This goes to show that money and value is about the mindset people have on. it.
—FEEDBACK. This is where your essay starts, Wanda. When you land on that simple and memorable claim that money is “Agreement and Acknowledgment,” you’ve found a way to communicate that money is more of an idea than a physical thing. It’s an understanding, not an object. Once your reader gets THAT, they will start to understand that the huge fei at the bottom of the ocean really CAN be money without anybody laying eyes on it . . . just like our bank accounts.
Paragraph 5. The people of yap also didn’t exchange/trade their feis/stones as they were usually too heavy to transport. Therefore, the ownership of their money would just change from person to person. In Friedman’s article the story of the stone money can be compared to France’s gold story. France bought gold from the U.S and instead of transporting large amounts of gold to France the U.S kept the physical gold and just acknowledged the ownership of the gold as belonging to the bank of France. This was possible due to trust and agreement.
—FEEDBACK. Now you start to get on a bit of a roll. Here your example is actually a bit TOO brief. Readers will have no idea what you mean by France’s gold if they’re unfamiliar with the story Friedman tells. Just a little bit of detail goes a long way. If you want to connect it to the story of the Germans cancelling the value of fei with crosses of black paint, the two visual markers of the black crosses and the labels on the drawers of “France’s gold” are there for the taking.
Is that enough to get us started? I’d like to know before we continue that you’re committed to revising this essay, Wanda. If so, I have all the time in the world to collaborate with you.
Apologies for the late response. There was certainly a lot of feedback to take it; and I assure you I took it all in including what you went over during class. I think I spent too much time worrying about the word count. However, I see that I need to get the point/thesis quicker (reminder: don’t “tease”/lead the reader on) and add more details/cows & chips to other areas. It may take a little bit but I will make my way back to this assignment to revise it.