Rai Stones and Banknotes: An Institutionalist Understanding of Micronesian Stone Money

McConnell, Scott L. B. (2019). Rai Stones and Banknotes: An Institutionalist Understanding of Micronesian Stone Money.

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Abstract: The debate around money’s origins is alive and well. The ‘metallist’ tradition that has dominated economists’ thinking on the history of money alleges that the value of money is driven by its intrinsic qualities. This intrinsic value is found most readily in money coined from precious metals. Money, therefore, has its origins in being developed as a transactions cost reducing technic al achievement that eases barter transactions. The ‘chartalist’ view of money, which arises counter to the metallist vision, contends that money is a ‘token’ or symbol of a debtor and creditor relationship that is founded upon social hierarchy. Money, therefore does not arise from precious metals, but rather, the precious metals were one of many tokens that could have been used to symbolize the debt. This paper will attempt to place the famous Yapese Rai Stone somewhere on this spectrum between metallist and chartalist, carefully exploring the history of the Rai Stone and how it functions within Yapese society, while considering aspects of the two conceptions of the history of money and considering what the Rai Stones and Yap might illuminate for this debate on the nature of money.

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Citation Key: McConnell2019RaiSA