This American Life: What is money?

Stone money near the village of Gachpar on the island of Yap. 
This object is about 8 feet or 2.4 meters high.

On the 7 January 2011 This American Life broadcast a show on the invention of money and what it is. 


The section where Jacob, one of the shows producers, talks about the island of Yap and their unique currency is a perfect illustration of how money, whether it is fiat money or gold or stone, only has value because everyone in society believes it has value.  The fact that they chose to use worked stone from a far away island that is 200km from Yap also illustrates that the only true value of anything is in a persons labour.  These stones represent an investment of the islands surplus labour in a form that is tangible and that does not loose intrinsic value over time or though weir and tear thereby making them a perfect medium of exchange (in other words: money).

Prologue from This American Life:

Ira Glass speaks with several members of the Planet Money team, who all found themselves—in the course of their reporting—independently asking the same stoner-ish question: What is money? Ira and Planet Money producer Jacob Goldstein discuss a pre-industrial society on the island of Yap that used giant stones as currency. The book that Jacob read about Yap is called The Island of Stone Money. (10 minutes)

Listen to the show here.