Wealth reserves are immovable whilst money moves, from pocket to pocket. A reserve of wealth is a mass and a currency is the measure of this mass.

Here is the first part of two articles that illustrate this proposition:

Yap stones

Yap Island Stone- offical money of Yap

Astonishing as it may seem, the stone shown here is still a perfectly valid means of payment on the island of Yap in Micronesia in the centre of the Pacific Ocean. Tourists who visit the island are always surprised to see the islanders leave their ‘money’ lying around in the street. Especially as we are not talking about small change! The biggest examples are 4 metres in diameter and can weigh up to 15 tons. But what is the origin of this very unusual currency?

Several centuries ago, the population of Yap Island visited the neighbouring island of Palau, 400 km away, where they found a very special rock: aragonite. This rock was unknown on Yap Island and they set about extracting it in large quantities from the caves on Palau. Then, once they had brought it home, they cut it into discs with holes in their centres where a stick could be placed which allowed them to be moved, rolled like a wheel on an axle. Over time the yap islanders started using them as a means of payment and the stones became known as ‘rai’.

The boat trip from Palau to Yap used to be full of dangers. Many lost their lives or returned with nothing. Given the number of discs available and the number of victims, the value of these stones never stopped increasing. In short, the danger of the boat trip and the rarity of the material (aragonite) made these stones an asset with great value to the Yap islanders.

But, you say, how can you correctly value a stone?
The rock’s specific beauty (aragonite is found as a component of pearls) and the history linked to the stone itself (its age, the number of victims produced by its extraction and transport) and its size all had an effect when determining the value, as did the social status of the parties in the transaction. Consequently, stones that were owned by rich people were worth more than those owned by common folk.

No stone has been produced since 1931. Due to their size and weight, they have slowly been replaced during the 20^th century by US Dollars, at least for everyday transactions of little value; However, major purchases, such as a house or land, are still completed even today using aragonite stones. In addition, they are used to pay compensation.

What is also quite remarkable is the manner in which transactions were conducted on Yap in the past (and still, today for major purchases). In practice, stones that changed ownership usually did not move! They simply remained at the location where they had been initially placed, alongside a road, in front of house or other building. The most surprising anecdote concerns a rich Yap family that had a huge ‘rai’ that no one had ever seen and, what’s more, could never see.  Apparently, according to the family, their ‘rai’ is at the bottom of the sea. Several generations earlier, an ancestor was towing it on a raft attached to his canoe when he was hit by a terrible storm. He cut the cord and left the raft to drift and watched as his enormous stone dived to the ocean’s bottom. As he survived, he was able to tell his story, describe the exceptional size and quality of the stone that he had lost. No one has ever questioned the truth of his testimony. The purchasing power of this stone has the same value as if it had been placed where everyone could see it next to its owner’s house.

The theft of a ‘rai’ is rare because these islanders operate mutual social control. Most of the Yap islanders know who owns the stones and have a great respect for other people’s property. And in any case, how do you steal a 15 ton stone without being spotted?

Source: Lautz, Th.,Steinreich in der Südsee. Traditionelle Zahlungsmittel in Mikronesien, Cologne, 1999

See our second article on “wealth is static”

Tags: DOLLAR, Money

This entry was posted on Wednesday, January 20th, 2010 at 6:45 pm and is filed under Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.