Money is something where I’d occasionally wonder to myself, where does it gain its value? It has always baffled me how people could imbue a piece of paper with such value and importance, or how similarly sized, designed, and manufactured notes could have an increased value just because of what is printed on them. Now that the topic arose in class, I have an opportunity to delve deeper into the topic and really find out where the value of our currency lies. In my previous “sessions” of thought on the topic, I’ve always reached a conclusion that money has value because people want it to.

Hearing about the Yap and their absurd currency of fei made me chuckle in class, until I realized how similar their style of currency and exchange mirrors ours, just in a primitive skin. The Yap used a form of ‘Stone Money’ as currency, and not like many traditional stone coins one might first think of. Instead of being pocket-sized and portable, these fei were larger than the people who owned it. Dr. Buchanan, a highly rated tax law and law professor with many places of education, including Harvard University, is quoted saying” Rather than putting a few seashells or gold coins in one’s pocket, owners of Yap stones found themselves in possession of heavy stone disks that could be as much as 12 feet in diameter.” (Buchanan).  It’s curious to think that instead of something portable that could be easily used in daily transaction, these people ended up dragging car-sized stones to their homes. This is neglecting to mention that these stones aren’t from a local quarry. The stones were mined and crafted on lands far away, on islands that contained limestone deposits. Islands up to 400 miles away! The stories became stranger, however, when it was mentioned that to make the aforementioned transactions the Yap simply declared a transition of ownership. They never moved the ‘coins’ from their original owner. They simply said “my wealth now belongs to…” and it was done. There had even been stories of a stone that was the largest to ever be made, but it sank to the bottom of the ocean on the journey back. To this day, three generations later, someone still claims wealth from that stone. A stone no one has had an tangible evidence of, or has ever seen; yet, it still provides wealth to the “owner”.

The Yap had a strikingly similar faith in “valueless” money to the faith we hold in currency today. How different is that sunken stone than a direct deposit from someone’s employer? The transfer of wealth today is much like the Yaps’. We move money that nobody has seen or touched through a digital stream of 1’s and 0’s to change ownership. The cycle can continue on this way until the final “owner” needs cash. But how long will it be until we can no longer redeem this “fake” money for cash? How long until cash-itself becomes obsolete?

Works Cited

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

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, n.d. Web. 01 Feb. 2015. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Shostak, F. (2004, January 20). How Does Money Acquire its Value? Retrieved February 2, 2015, from http://mises.org/library/how-does-money-acquire-its-value

Buchanan, N. (2013, February 7). Dorf on Law. Retrieved February 2, 2015, from http://www.dorfonlaw.org/2013/02/money-is-magic.html