Friday, February 11, 2011

Rock, Paper, Scissors

So, today's blog is all about money, or the idea of money.  Because, really, money is only an idea. 

I was out shopping with Sarah yesterday afternoon, because her newly acquired birthday money was burning a hole in her pocket.  I also had something to spend:  a Bath & Bodyworks coupon, to buy a certain dollar amount and receive more in merchandise free.  Anyone who knows me well knows how I love coupons.  I get my scissors out and basically make my own money, clipping away.  All those pieces of paper can be traded for stuff, or cash back. 

I once said to a friend how amazing it was that I could just trade a little piece of paper for stuff, meaning a coupon, and realized the same was true of money.  It has no value on its own; its only value is in the faith consumers have that a bill with a certain face denotes a certain value.  During failed economies, like the Weimar years, families would load up wheelbarrows full of cash to trade for one loaf of bread. 

So, here's where the rock comes in.  Recently, on NPR, a couple of economists were explaining exactly this:  the faith which propels our economy, not goods.  An island culture out in the Pacific (I forget which country), does not use cash.  They use rocks.  Unluckily for them, one especially huge and fine rock was being transported by boat to the island and fell into the ocean, where it sits on the ocean floor.  The islanders STILL use that rock as currency, because they will buy and sell ownership of it, knowing that it is there. 

Fascinating. 

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