The Million Dollar Question

Money has been the key ingredient in making the world go round for as long as anybody could even remember. It is the one thing that everybody would love to have, and if they don’t have it then they dream about having the most that they could possibly think of. It could change the way you live your life completely by the difference in how much you truly have. It is the one thing that people all over the world spend most of their lives working for and chasing. What if the main thing that you spent most of your life on getting more of, just simply was never real.

What really is money? In “The Invention of Money” from the Planet Money team at NPR, we get into an explanation of how real money actually is. We start off with a fantastic example explaining where our money goes whenever somebody has to take a loan out of the bank for a big purchase. Since the bank could only hold so much money while also holding many people’s bank accounts, that means that the bank has to take out dollar bills that are technically considered our own money when giving it out to the person who asked for the loan. Now when trying to count all the money in the world, are we going to consider the money that the person just loaned their own money or your own money since it came from your bank. There is no possible way for us to count the money that is being given out from our bank that holds our accounts without having to double count or making a mistake along the way. We can go even deeper into a rabbit whole if we want to talk about how the person who has loaned the money could possibly give it out as payment to somebody that has helped the loaner. Now we get into an even deeper problem since your “money” is just getting tossed around everywhere letting everybody touch it while you’re in your room thinking that it is your money when you see it on a plain screen. It goes on to show that money doesn’t mean anything and isn’t real unless you actually hold it to a certain point of value in the world. It would have to take the whole world to believe that money has an enormous impact on the world for it to work the way that it does.

The value of money is different to everybody since everybody has a different view on what it really means to them. What if everybody just simply decided that they didn’t want to hold money up to the value that it has now. In the article “The Island of Stone Money,” made in 1991 by Milton Friedman, we get introduced to an island along the German colonies named the Caroline Islands. In these islands, there is a different type of currency that might seem a little off because of how different it is compared to the type of currency we are used to. The currency in these islands are in fact made out of stone instead of paper. This stone money is called fei and it is in fact extremely big, ranging from 1 to 12 feet long in diameter. Even though this type of currency might sound like the farthest thing from something that might actually work, it ended up working for one reason and one reason only. People on these islands held value to this type of currency and have put their trust in it which has made this piece of stone a really big part of their society now. As time went by, the German government would go on to buy these islands and own ownership to them. After already buying the islands, the government seemed to have noticed that a lot of the roads and highways were in extremely terrible condition. They would have to get fixed as soon as they could so that people were able to travel where they wanted to freely. The government would proceed to ask every chief of each district to have these roads fixed and able to be driven on. When the chiefs weren’t done as they were told, they would proceed to have a big fine posted against them for not following directions and not listening. The fine would continue to be carried out as a man would go on to each district and mark a cross in black paint among the most valuable pieces of fei that they could find to mark it as government property. All it took was a marking of a cross in black paint for the people to believe that it was the government’s property. As long as people hold it to high value and see that everybody is trusting it, anything can be currency. 

Something similar along these guidelines that show how money isn’t real and that people are just giving it a ton of value while trusting it are NFTs. In an article titled “NFTs are still worth something – just not what you think,” by the company FastCompany, they state “An NFT has value because the buyer and their community believe it has value.” An NFT is just another picture on a screen which isn’t real at all, but people begin to give it value and that high praise of value made them what they were before they began to fall off a tiny bit. It goes on to show that even though the certain object isn’t real, it could still sell off and be traded because of how many people trust in it and see it as something they could use or want/need. So how different is this than the currency we currently use.

What if the main thing that you spent most of your life on getting more of, just simply was never real. Although the actual currency and money that we see everyday is fake, it is the people who trust in it that give them value in the world.

References

• Captain, S. (2022, May 17). NFTs are still worth something—just not what you think. Fast Company. Retrieved September 27, 2022, from https://www.fastcompany.com/90752573/nfts-are-still-worth-something-just-not-what-you-think

• Friedman, M. (1991, October 5). 1991 Island Stone Money. Collected Works of Milton Friedman. Retrieved September 27, 2022, from https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full

Planet Money. (2011, January 7). The Invention of Money. This American Life. Retrieved September 27, 2022, from https://www.thisamericanlife.org/423/the-invention-of-money