Money: a Product of Faith
Faith: one of the most important qualities that humanity holds onto. It is what drives most of our motives and values. When discussing faith, one may instantly be led to imagine religion, existentialism, or anything that appears outside of themself. However, it would be counterintuitive to imagine something we deal with every day to be a product of faith. However, that is exactly what we do with currency. The money we use everyday are simply small bills with faces on them, but we value them differently at one, five, ten, one hundred dollars and so on. Money, and currency in general, only have value relative to the perceived value we as humanity place on that object.
To begin, there must be an overall definition of currency; one quality that creates a commonality of all the different forms of currency that has taken place across humanity’s timeline. For people today, that may be the United States’ dollar, which can determine our wealth or be used as a tool to trade commodities. Before we established that, gold was the main marker of how much wealth a country owned. Looking back even further, to the earliest societies, resources like wheat and cattle were traded directly with one another. Each of these examples are considered a currency to their respective civilizations, so there must be a commonality that we can analyze. Currency is broken up into two parts, which for the most part go hand in hand. Currency either determines how much wealth an individual has, or it can be used to trade goods with one another.
Currency looks different for every culture. For the island of Yap, it was limestone coins. Milton Friedman analyzed this island in his The Island of Stone Money. Friedman explained that this island, which was part of the Caroline Islands, was devoid of all metals, so in order to determine currency, they mined and minted limestone coins. According to Friedman, these stones can vary from 1 foot to 12 feet tall. Much like other physical forms of currency, a larger proportion equaled more wealth. These stones would be traded for land, houses, or anything else that was able to be bought and sold. While the island initially moved the stones from owner to owner, Friedman discovered that they eventually stopped moving stones, and just kept a note on who ‘owned’ the stone. Everyone believed that a person would own the stone, even if that same person has never seen or touched it. An extreme example of this was when one stone, rumored to be of great proportions, had to be tossed overboard due to a bad storm. After returning to the island, everybody heard about the stone, but they all came together and agreed that the stone was still legit and was able to be traded. Even though it was at the bottom of the sea, never to be retrieved or used physically, it still has value, all because the islanders believed that it still had value. Many would assume that Yap was just primitive, but this way of thinking is present modern day as well.
Brazil’s economy was on the verge of collapsing not too long ago. In the podcast episode The Lie That Made Brazil by Chana Joffe-Walt, it was stated that in 1990, the inflation rate on a monthly basis was 80%, which led to items being exponentially higher in cost in just half a year. After two failed attempts at trying to resolve this inflation, Edmar Basha, one of four of the economists that saved the economy, was called for a plan of action. He, along with three of his friends knew that it would be more than just macroeconomics; they needed to convince the people to trust the money. So, according to Joffe-Walt, the plan of action was to create a new form of currency that was stable and unchanging. It was called Units of Real Value, or URVs for short. While cruzeiros, the current Brazilian currency, was still fluctuating, URVs remained the same value, so people became comfortable with thinking in URVs. The one thing to realize though was although it was shown everywhere, URVs physically did not exist. The Brazilian people believed in its value though, so when the Brazil government switched currencies from cruzeiros to one that mirrored URVs, but were made physical this time around. Since people were so comfortable with URVs the transition to the new printed currency was very smooth and ended up lowering the inflation considerably. While it may seem obvious that currency issued by the government gains value, but perceived value also comes from currency independent of anything federal.
While stones and government-backed online currency can have real value, the real concept of something only having value because of faith is Bitcoin. In the article The Bubble Bursts on E-currency Bitcoin, author Anne Renaut reveals that Bitcoin is made of complex streams of code, and was introduced by an anonymous programmer. It gains its popularity through the concept of a currency that is separate from the Federal Reserve or the government. Its value is constantly going up and down, but as recognition and approval increases, there is more value that comes from it. The more people believe that Bitcoin is valuable, the more valuable it actually becomes. Renaut even shows the Winklevoss twins have become huge advocates of Bitcoin, and says it will go even farther. However, as shown by these previous examples, Bitcoin’s value will only go as far as people will let it go.
It is human nature to have faith in something, especially something that provides simplicity for us. The US dollar again, has no intrinsic value physically, but the whole world has given it value, and so those slips of linen in our wallet pays for our houses, meals, cars, and everything else. Farmers who had to sell their best cattle for something they needed may look at us in confusion and envy, asking why we value what we do. Perhaps that is a question we ask ourselves as well. Logically, it does not make much sense. That is the trick about faith though: it does not have to consider logic. It simply believes.
References
1991 island stone money – hoover institution. (n.d.). Retrieved September 26, 2022, from https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full
The bubble bursts on e-currency Bitcoin. (n.d.). Sg.news.yahoo.com. Retrieved September 26, 2022, from https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html
The Lie That Saved Brazil. (2017, December 12). This American Life. https://www.thisamericanlife.org/423/the-invention-of-money/act-one
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Counterintuitive Fall 2022 
I think I am mostly concerned whether fundamentally it is structured well enough and maintains the common idea and main point throughout the essay. As long as that is checked first, I am also very open to the nitpicking of grammatical errors
If by “structured well” you mean, does my essay devote one paragraph to each of three related episodes in the history of money, with an introduction and a conclusion?, then, yes, the essay is structured exactly as you and many other students have chosen to structure theirs. It’s an understandable pattern, but it doesn’t communicate your ideas well unless you not only tell the stories but connect them thematically and guide your readers to the conclusions you wish them to draw in each case.
You do that only moderately well. I can help you recognize where your guidance falls short, if that’s what you’d like to accomplish next.
While your intelligence and intentions are evident throughout, Anonymous, you make mistakes of grammar and syntax in almost every sentence. Some are repeated often, so correcting one (and then repeating that correction) might resolve a dozen errors. Others are unique.
I agree it would be best to bolster your argument first before we look at the language problems. Would you like to start with argument?
Yes I would like to go through my shortcomings of my argument. If what I need to do is better connect my points to my theme to draw a better conclusion then I’m ready to get after it.
Paragraph 1.
Hey, Anon, I want to suggest a change of tone for you. You may find it liberating. Your voice in this piece sounds labored and artificial. Let’s loosen up a bit.
Does it make you more comfortable to be given permission to write less “academically”?
P2.
I appreciate the search for “a commonality.” It’s essential in the Definition/Categorical section of your argument. In short, you want to answer the question, “What do dollars, gold, and cattle have in common?” The answer is “Not enough.”
Dollars have zero intrinsic value. Gold is prized as a commodity but is useful for trade between traders who have no interest in its shininess or conductive capability. Cattle are very valuable but only to people who intend to butcher them. So, you’ve actually traced backwards the evolution of currency through three eras that have very little commonality.
Cattle ARE NOT currency if they’re traded to a meat consumer. Gold IS NOT a currency if it’s traded to a jeweler. Dollars are ALWAYS a currency unless they’re traded to a collector of rare bills.
You could rework this paragraph to make your point.
1. BEFORE currency, cattle were traded for wine: two commodities: no faith required.
2. Gold was a valuable currency because everyone recognized the intrinsic AND the currency value of gold.
3. Dollars are valuable ONLY BECAUSE we have faith that everyone we offer them to will also find them valuable: pure currency.
P3
You say: Currency looks different for every culture.
I say: And it can because it all serves the same purpose—its commonality—that the people of that culture have faith in its value.
You say: For the island of Yap, it was limestone coins.
Get it? Tell us WHY you’re telling us what you’re telling us.
You say: Milton Friedman analyzed this island in his The Island of Stone Money. Friedman explained that this island, which was part of the Caroline Islands, was devoid of all metals, so in order to determine currency, they mined and minted limestone coins.
I say: Why? Would they have used metal if the island held it? Why is money made of things that aren’t easily accessible? Why go 400 miles across the sea to find limestone? It’s quarried, not mined.
You say: According to Friedman, these stones can vary from 1 foot to 12 feet tall. Much like other physical forms of currency, a larger proportion equaled more wealth.
I say: You wanted to find parallels across currencies. Here, size determines value; for dollars, it’s simply the number we print on the bills.
You say: These stones would be traded for land, houses, or anything else that was able to be bought and sold. While the island initially moved the stones from owner to owner, Friedman discovered that they eventually stopped moving stones, and just kept a note on who ‘owned’ the stone. Everyone believed that a person would own the stone, even if that same person has never seen or touched it. An extreme example of this was when one stone, rumored to be of great proportions, had to be tossed overboard due to a bad storm. After returning to the island, everybody heard about the stone, but they all came together and agreed that the stone was still legit and was able to be traded. Even though it was at the bottom of the sea, never to be retrieved or used physically, it still has value, all because the islanders believed that it still had value.
I say: That’s a LONG section that doesn’t “pay off,” Anon. What’s the argument value of these sentences? If we don’t know, you’re wasting words. If you BEGAN with the VALUE of the observations, we’d be nodding like bobbleheads all the way through.
You don’t need to tell the whole long story of massive Yap coins, or the whole long story of how the gold in America’s possession was transferred to the French, or how a line of code can send a billion dollars from one bank account into another. But you DO need to establish the commonality, since that’s what you promised us.
Is that enough feedback for you to make some revisions?
You don’t have to, but I won’t work this hard again on your essays unless you do.
🙂
This has certainly provided a lot of insight for me to do revisions. This course has exposed my old method of writing information and then bringing “the big picture” near the ending. I realize now that beginning the argument with why what I am saying is important is more engaging and doesn’t waste as much time.
All of your other notes of feedback provide many ideas that I will work on implementing in my revisions. I certainly am appreciative of the effort in this feedback, and I will work to return my revisions back as soon as I can.
Good to hear, Anon.
Put this back into Feedback Please following revisions, and I’ll be happy to regrade.