Yap Money: A Weird Story About Money

What follows is an incredible story of a well developed economy based on giant, round, immovable stones.

A small island called Yap held an indigenous population that was untouched by civilization until the 1800’s when Spanish colonizers discovered them.

What they found so interesting was that despite their primitive nature, they had a very advanced and well-developed system of money.

They used these large, round, thick stone ‘wheels’ with a hole cut out in the middle in which they could insert a pole to help with its transport.

When I say large, I mean as large as 12 feet in diameter!

 

Even though they could be transported, they rarely were. They merely offset transactions against each other. Any outstanding debts would just be carried forward in expectation of some future exchange.

Some transactions were large enough to involve a price of an entire stone (called a Rai). But even these Rais were RARELY moved. The acquirer of the Rai was happy to leave the stone in its original location undisturbed on the previous owner’s premises.

My favorite part of this story! —->

There was one family whose wealth went unquestioned despite the fact that the Rai the ‘possessed’ had never been seen by anyone, including the family itself!

This was because during its transport it had fallen into the sea and sunk to the bottom of the ocean.

Everyone agreed that this unfortunate incident shouldn’t change the fact that the family still owned it, despite the fact that it was separated by a few hundred feet of water.

So the purchasing power of that stone remained as valid as if it were leaning against their house.

Why I love this story:

It seems so strange to try and imagine how this system could even work. Only then do I realize that we have the exact same system today.

Our stone ‘Rai’ are merely gold in a storage facility somewhere.

Or they are the ‘cash’ in a bank that I never see while I am transferring digits on a computer or iphone from one person to another.

Eventually the cash we use might disappear completely, and the numbers on our computer screen will be backed by agreed upon beliefs which have been the basis of economies for centuries.

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