If Money is Fiction, What Happens When People Stop Believing in It?

This American Life argues that money is a fictional idea that we all agree upon; Kurt Vonnegut speculates on what happens if we stop believing in money.

Folksonomies: economics speculation memes science fiction ideas money currency

Money is Fiction

Ira Glass: For money, afterall, long ago, we used to use gold, and if you wanted to buy something, you had to carry around these heavy, shiny pieces of metal. Then we decided, no, let\'s just leave the gold in a bank. Instead of the gold, we\'re going to carry around these pieces of paper, and the paper on them says, \"Yes, there\'s gold. You can take this paper money to a bank, you can swap it for gold.\" Maybe you\'ve seen old dollars that say on them \"Promise to pay the bearer so many dollars in gold.\" You could swap it.

Then we decided, it was the year 1933, we decided you can\'t trade in dollar bills for gold anymore in this country. Dollar bills are just gonna represent the idea of money. That\'s it. They\'re not gold, they\'re just money. And when I talked about this with Jacob, he said, it get\'s more abstract:

Jacob Goldstein: Because now, if you think of most of the money that you have or most of the money that I have, it\'s never currency, right? I get paid, that is just a direct deposit from NPR, from my employer to my checking account. I never--It\'s not like they give me a few hundred dollar bills every week. And then, you know, I pay my bills online, so now, currency even now is like old fashioned. You know, you don\'t have to touch money, you don\'t have to see it. It\'s just information.

[...] The money doesn\'t really exist. Not only is there no gold, there aren\'t even bills for most of the money that exists. Most of the money that exists is just the idea, it\'s just the bank saying \"Yes, there is this much money in your account.\"


Today there is not gold backing money, nor even bills for much of the money possessed by the people of the United States. It\'s just and idea we agree upon.

Folksonomies: economics memes ideas money currency

Cause and Effect

What If People Stopped Valuing Money?

Mexico and Chile and Brazil and Argentina were likewise bankrupt--and Indonesia and the Philippines and Pakistan and India and Thailand and Italy and Ireland and Belgium and Turkey. Whole nations were suddenly in the same situation as the San Mateo, unable to buy with their paper money and coins, or their written promises to pay later, even the barest essentials. Persons with anything life sustaining to sell, fellow citizenes as well as foreigners, were refusing to exchange their goods for money. They were suddenly saying to people with nothing but paper representations of wealth, \"Wake up you idiots! Whatever made you think paper was so valuable?\"

* * *

There were still plenty of food and fuel and so on for all the human beings on the planet, as numerous as they had become, but millions upon millions of them were starting to starve to death now. The healthiest of them could go without food for only about forty days, and then death would come.

And this famine was as purely a product of oversize brains as Beethoven\'s Ninth Symphony.

It was all in people\'s heads. People had simply changed their opinions of paper wealth, but, for all practical purposes, the planet might as well have been knocked out of orbit by a meteor the size of Luxembourg.


Vonnegut describes a fictional account of the currencies of numerous countries in the world suddenly being no longer valuable, making them just pretty paper.

Folksonomies: value money currency