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Furness wrote about the people of Yap, several thousand inhabitants living on a small island in the Pacific Ocean, about halfway between Papua New Guinea and China. An ocean and an economic paradigm away, Cambridge University economist John Maynard Keynes had already discovered Furness’ writing because he discussed the same stone money in his Treatise on Money²⁷² – though Friedman never mentioned that. Like Keynes before him, Friedman thought the story of the Yap was nicely allegorical.

The people of Yap did not produce solely for their own needs, as First Peoples did. They also produced to exchange, Furness explained, buying and selling fish, pigs, and labor to build each other’s houses. Also unlike First Peoples, the Yap had systematic differences in wealth and social status, even a slave class.

The Yap system of exchange had produced differences in accumulated wealth represented by stone coins, called fei. These were made from limestone quarried on the island of Babelthuap, some 400 miles away. They were of different sizes, between one and twelve feet in diameter, and when they were this big, a hole was cut in the middle so they could be carried on a pole, slung shoulder to shoulder between two people. The value of a fei was measured in spans from the index finger to the thumb – the larger, the more valuable. If too large, they were stored outside the house.²⁷³

Concludes Furness, “the simple-hearted natives of Uap [Yap], who never heard of Adam Smith, have solved the ultimate problem of Political Economy, and found that labour is the true medium of exchange and the true standard of value.”²⁷⁴ The Yap had discovered money as a way to represent exchange value.

When a fei was too large and difficult to move, the person who had exchanged his product did not necessarily need to take physical possession (and it was only men who engaged in exchange). After a sale, “its new owner is quite content to accept the bare acknowledgment of ownership and without so much as a mark to indicate the exchange, the coin remains undisturbed on the former owner’s premises.” In this way, Furness goes on, “[t]he purchasing power of that stone remains, therefore, as valid as if it were leaning visibly against the side of the owner’s house, and represents wealth as potentially as the hoarded inactive gold of a miser of the middle ages, or as our silver dollars stacked in the treasury at Washington, which we never see nor touch, but trade with on the strength of a printed certificate that they are there.”²⁷⁵

Having told his version of the Yap story, Friedman asks, “how many of us have literal personal direct assurance of the existence of most of the items we regard as constituting our wealth? Entries in a bank account, property certified by pieces of paper called shares of stocks, and so on and on, illustrate how important ‘myth,’ unquestioned belief, is in monetary matters.”²⁷⁶

The meaning of the thing we call “money” was not just in the fei stones on Yap. Nor is it in our modern experience of markets (just) in the pieces of paper that are banknotes, or the plastic of credit cards, or an invoice or receipt, or the information we can today pull up on screens about our account transactions or balances – some of the multimodal media and transpositional practices by which we mean “money” today.

These texts, and objects, and images transpose for each other because they are not meanings by themselves. Rather they subsist in a social system of value transactions where these objects and actions only make sense as meaning transpositions, never just meanings-of because there are also meanings-in.^§MS2.2c The meaning of each transposition is within a system of credit and clearance, the decentralized negotiability of value.²⁷⁷ Such meaning is generated in the meeting of differential interests, and these interests are both solidary and antagonistic – obviously, deceptively, contradictorily, fluidly, unstably so.

Friedman could agree with Keynes on only a few things. One was the role of money in establishing certain kinds of elementary bonds of sociability in the process of exchange. The Yap were a salutary example for both of them. But beyond this, there was very little agreement.

Keynes’ larger conclusions about the politics of money, and the tension between solidary and antagonistic interests, was offered as a solution to the Great Depression in his magnum opus, The General Theory of Employment, Interest and Money. Here he argued that markets could not be trusted to support human interests and that sociability needed to be underwritten by governments. Intrinsically antagonistic interests in markets needed to be resolved by the state in the humane interests of civil society.

Indeed, with its monopoly over the creation and regulation of money, this was an essential social responsibility of governments – hence the necessity of deficit spending in times of economic contraction, and financing the welfare state to guarantee humane levels of access to material goods, as well as in purely economic terms to buttress aggregate demand during downswings in the business cycle.²⁷⁸

Friedman disagreed vehemently, and eventually Ronald Reagan, Margaret Thatcher, and their successors came to follow Friedman’s line of thinking rather than Keynes’. At root was a fundamental disagreement about the underlying configuration of human interests, expressed through money and markets in all their multimodal transpositions.

Returning to the rosier side of Adam Smith, Friedman said that capitalism guaranteed freedom as a consequence of its “proposition that both parties to an economic transaction benefit from it, provided the transaction is bilaterally voluntary and informed. Exchange can therefore bring about co-ordination without coercion … Since the household always has the alternative of producing for itself, it need not enter any exchange unless both parties benefit from it.”²⁷⁹

Because the sociability of markets is inherently solidary, argued Friedman – though here we are using our terminology – governments should be as small as possible, and they had no business spending in deficit or supporting a welfare state.²⁸⁰ “No such thing as a free lunch,” he titled one of his best-selling books,²⁸¹ a paean to markets and their arguable freedoms. Besides, he claimed controversially, government didn’t solve the Great Depression; it had created it.²⁸²

Sociable markets certainly are, but the matter for dispute between Keynes and Friedman was whether that sociability is to interpreted to be intrinsically solidary (Friedman) or antagonistic (Keynes).

A more nuanced version of the analysis is that they are solidary to a degree, but also at the same time antagonistic, albeit sometimes deceptively so. The antagonistic part is in the inequalities that effectively make some bilateral transactions to some extent involuntary, for instance when, as between buyer and seller, boss and worker, there are power differentials. It is also hard to imagine how a modern household could produce for itself, a “freedom” Friedman proposes. Without inherited wealth it is difficult to see how it is possible to avoid the labor market.

So, it matters which parsing of the meaning of sociability you choose in the configuration of differential interests in the market. When we explore the interests expressed in multimodal transpositions mediated by money we find meanings which seem solidary in one moment but that are in conflict in another.

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²⁶⁹ Milton Friedman and Rose D. Friedman, 1998, Two Lucky People: Memoirs, Chicago, IL: University of Chicago Press; Lanny Ebenstein, 2007, Milton Friedman: A Biography, New York: Palgrave Macmillan.

²⁷⁰ David Harvey, 2005, A Brief History of Neoliberalism, Oxford: Oxford University Press.

²⁷¹ Milton Friedman, 1992, “The Island of Stone Money,” Vol. E-91-3, Working Papers in Economics, Stanford, CA: The Hoover Institution.

²⁷² John Maynard Keynes, 1930 [1950], A Treatise on Money, Volume 2, London: Macmillan, p. 292.

²⁷³ William Henry Furness, III, 1910, The Island of Stone Money: Uap of the Carolines, Philadelphia, PA: J.B. Lippincott, pp. 57, 93–95; Cora Lee C. Gillilland, 1974, “The Stone Money of Yap: A Numismatic Survey,” Vol. 23, Smithsonian Studies in History and Technology, Washington, DC: Smithsonian Institution Press.

²⁷⁴ William Henry Furness, III, 1910, The Island of Stone Money: Uap of the Carolines, Philadelphia, PA: J.B. Lippincott, pp. 92–93.

²⁷⁵ Ibid., pp. 96, 98.

²⁷⁶ Milton Friedman, 1992, “The Island of Stone Money,” Vol. E-91-3, Working Papers in Economics, Stanford, CA: The Hoover Institution, pp. 4–5.

²⁷⁷ Dror Goldberg, 2005, “Famous Myths of ‘Fiat Money’,” Journal of Money, Credit and Banking 37(5):957–67, pp. 14, 61; Felix Martin, 2014, Money: The Unauthorized Biography, New York: Alfred A. Knopf.

²⁷⁸ John Maynard Keynes, 1936, The General Theory of Employment, Interest and Money, London: Macmillan.

²⁷⁹ Milton Friedman, 1962, Capitalism and Freedom, Chicago, IL: University of Chicago Press, p. 13.

²⁸⁰ Milton Friedman and Walter W. Heller, 1969, Monetary Vs. Fiscal Policy, New York: W.W. Norton.

²⁸¹ Milton Friedman, 1975, There’s No Such Thing as a Free Lunch, LaSalle, IL: Open Court.

²⁸² Milton Friedman, 1962, Capitalism and Freedom, Chicago, IL: University of Chicago Press, p. 45.

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Kalantzis, Mary, and Bill Cope. 2020. Adding Sense: Context and Interest in a Grammar of Multimodal Meaning. Cambridge UK: Cambridge University Press. pp. 276–279. https://doi.org/10.1017/9781108862059

Milton Friedman’s “Island of Stone Money” §AS2.4a