Invention of Money-Kirsten Smith

I haven’t really ever thought about how abstract the idea of money is. The intrinsic value of money is fictional. Paper dollars, metal coins, and numbers in a computer system mean nothing if we don’t give them meaning. When people don’t believe in money it loses its value. Money is really just an idea, yet in our minds, the item that we chose to represent this abstract idea with, is what holds the value. This very reason is why America’s banking system collapsed and why the Great Depression occurred. When the French demanded that their gold be set aside to make sure that the United States wasn’t going to spend it, nothing changed. The United States knew its debt and they had the gold in their possession to pay it back, it was just locked away in a vault. As soon as the gold was relabeled, the United States felt as if they had experienced a great loss, when in reality they still held the gold that they “paid” the French in their vault.

The Yap, however, would have viewed the transaction between the United States and the French complete. I think that the Yap might consider the fact that we keep most of our wealth in an electrical system without much visual or tangible reassurance other than virtual numbers, the most bizarre. When you think about it though, we all really are just trading fictional numbers when dealing with money. Who says that milk should cost $3? Why can’t it cost $300 and minimum wage be $800 an hour? It doesn’t matter what the figurative cost of something is, as long as it makes sense in scale we use. Money is an idea not an object and “dollars” are an object not an idea. That is precisely the reason why different countries can have different currencies and still trade.

For money to exist, it has to be reliable. That is exactly why the Brazilians started to trust the new currency because the new money’s value stayed the same throughout the day, week, and for months to come. The amount of debt the United States is in at the current time has certainly raised questions about how reliable our money is. If the President can keep raising the debt ceiling, then what is the point of having money at all? At some point this country’s whole money system has to come crashing down unless the debt is fixed. We could be facing the same fate as Brazil did just a few short decades ago.

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5 Responses to Invention of Money-Kirsten Smith

  1. smithk53 says:

    Could you please give me some help on how to improve my draft for the re write.

  2. jodidziedzic says:

    “When people don’t believe in money it loses its value.” Haha, it’s a pun. Although, I’m not even sure if you really need that sentence! Either way I like how you worded it.

  3. davidbdale says:

    Hey, Kirsten!
    P1. I’ve said this many other places, but not yet here: You’ll be concentrating on the abstract concepts of money, value, currency, and worth in your rewrite and not at all on your personal revelations on the topic. If you want to save your first person disclosures, generalize them into first person plural (we!) claims, such as:

    Money is a useful fiction, a story we tell about the value we place on our labor and the beneficial things of real worth that we produce, like cows or potato chips. Paper dollars and metal coins are only worth a bag of chips because we say so and trust others to say so as well. When people don’t trust our money, we go hungry.

    You’re already halfway there; just lose or transform the “I haven’t thought” language.

    It is very hard to agree that the Depression occurred because the French wanted their gold set aside, Kirsten, and harder to follow your sentences: “Money is really just an idea . . . Depression occurred.” The notions of idea, our minds, item, represent, idea, holds value don’t quite come together convincingly.

    There is something of real value here, but I’m not following the argument. You don’t follow through on your promise to explain the Depression. Did America’s banks fail because “America” felt a loss?

    This may or may not help, but suppose I’ve bought a house with a mortgage. No matter how much I earn this year, unless it’s more than the cost of my house, the bank I owe could ask me to “mark” all the money in my account as “theirs,” since I owe it, and more, to them. But I can still spend money on other things, and conduct business as usual, as long as everybody doesn’t demand payment in full from me instantly for something I financed for 30 years. The bank trusts that eventually I will earn enough to pay them back. That’s credit, which is different from cash. Governments (like everybody else) get into trouble when other governments stop believing they’ll ever be able to pay, and try to get their money out first before they lose it.

    P2. I’ve said this elsewhere too: You’ll have to provide your readers whatever background they need to understand the Yap illustration. You can’t assume they’ve read what you read or listened to the NPR broadcast.

    I wonder if you’re right about the Yap’s attitude toward electronic transfer. They seem comfortable with invisible stones at the bottom of the sea. What’s the big difference?

    Of course, you may not say “you,” even in innocuous phrases like, “when you think about it.”

    I’d like you to try to eliminate rhetorical questions entirely, Kirsten, particularly rhetorical illustrations. Substitute bold, clear, positive claims instead.

    Obviously, the numbers we apply to our transactions are arbitrary until we agree on them. Milk probably used to cost a penny. Now it costs 300 pennies, so, for convenience’s sake, we call it 3 dollars. If inflation ever got completely out of hand, we’d start thinking of $100 bills as singles and hope that the rest of the world’s currencies would recognize them as valuable.

    I love your distinction between money and dollars. It’s essential and wise of you to make it. I’m unclear, though, how it explains our ability to exchange currencies with other countries. This deserves a clearer explanation and significantly more development if you’re up to it, Kirsten. (And of course it has everything to do with the French demand for a gold set-aside. They weren’t willing to put the same faith into our idea of what a dollar was worth as we were!)

    P3. Again, you’ll have to explain to readers what you mean by the Brazilians’ new currency. Does US debt create doubt in America about our dollars, or is it foreign governments you think have questions?

    Your RQ about the debt ceiling is an excellent example of the grave danger of all rhetorical questions: it seems to have a meaning, but we can’t tell what it is. Is there some reason we can’t both have money and borrow more this year than last year? I don’t dispute what appears to be your contention that there is a danger to excessive debt, but you’ll be more persuasive making that claim directly than asking leading questions. My personal answer to your question is: Your question makes no sense; how else would we keep track of our debt if we didn’t have a money system?

  4. smithk53 says:

    Thank you so much for the feed back on my assignment. It really helped me realize where I needed more explanation or where I needed less. A lot of times when I write I notice after the fact that I had great thoughts in my head, but I didn’t express them very clearly in my paper. Your explanation was perfectly in depth and clear about what you wanted and how I could fix my post, which is not what I was used to in my last comp class where I would get vague comments that didn’t even make sense and seemed to have been copied and pasted to every students paper. I appreciate the time that you put into my paper and I truly think that over the course of this class that your comments could really help me be a more clear writer.

    • davidbdale says:

      This makes me very happy, Kirsten. Now if you could help me understand why my class is so silent and few of you seem to want to talk to me (while many of you seem to appreciate what I’m dong), I’d be deeply in your debt. 🙂

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