The History of Money (Encore)

Shells & Stones

Shells and stones have served as currency in various cultures, each with unique practicality and cultural significance. Gary Arndt highlights the use of seashells, such as wampum in North America, which were portable and relatively rare, making them effective as money 1. On the island of Yap, giant stone wheels known as rye were used as currency despite their impracticality in terms of portability. The rarity of these stones, which had to be transported from Palau, and the communal acknowledgment of ownership made them valuable.

You might be thinking that this would be a horrible form of currency. You can't carry it around, and it isn't necessarily fungible.

--- Gary Arndt

This system of public acknowledgment allowed the stones to function as a form of money without needing to be physically moved.

   

Scarcity & Value

The value of unconventional currencies like shells and stones is deeply influenced by scarcity and cultural practices. Gary Arndt explains that the scarcity of shells and their use in jewelry and belts contributed to their value as currency in various regions 1. Similarly, the limestone stones used as money on Yap were valuable due to their rarity and the effort required to obtain them. Cultural practices, such as public acknowledgment of ownership, further enhanced their value, demonstrating how social constructs can influence economic systems.

The stones were made out of limestone, and there was no limestone to be found on Yap.

--- Gary Arndt

This scarcity, combined with cultural acknowledgment, made these unconventional currencies effective in their respective societies.