Why money is the biggest shared hallucination in human history
The Story of Money
Manuela Saragosa
4.4 • 397 Ratings
🗓️ 13 May 2026
⏱️ 45 minutes
🧾️ Download transcript
Summary
What is money? And what can a small island in Micronesia teach us about how it works? On Yap, a remote island in the western Pacific, giant calcite “Rai” stones once functioned as currency, where ownership and collective trust — rather than physical possession — defined wealth and status. In this episode of The Story of Money, macroeconomist and author Felix Martin joins hosts Gillian Tett and Robin Wigglesworth to explore the stones of Yap, the origins of money and why the traditional “barter theory” may be a myth.
Further reading:
Money: The Unauthorised Biography (2015) by Felix Martin
Uap of the Carolines (1910) by William Henry Furness III
A Treatise on Money (1930) by John Maynard Keynes
The Island of Stone Money (1991) and Money Mischief (1992) by Milton Friedman
‘Tralla La’ in Uncle Scrooge #6 by Carl Barks (1954)
His Majesty O’Keefe (1954) Warner Bros
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Hosts: Gillian Tett and Robin Wigglesworth
Guest: Felix Martin
Producer: Lulu Smyth
Senior Producers: Laurence Knight and Michela Tindera
Executive Producers: Flo Phillips and Manuela Saragosa
Original music: Breen Turner
Broadcast engineers: Bianca Wakeman and Petros Giuompasis
Podcast Development: Laura Clarke
FT Global Head of Audio: Cheryl Brumley
Video editors: Kristen Kenyon and Josh Divney at Podcast Discovery
Read a transcript of this episode on FT.com
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Transcript
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| 0:00.0 | Money starts from a set of ideas. |
| 0:02.5 | It starts from the underlying system of credit and clearing. |
| 0:08.4 | And then what is used as a token to represent that can actually be anything at all. |
| 0:14.7 | It could be gold coins or it could be stone discs. |
| 0:29.5 | Today on the story of money. |
| 0:36.1 | Well, Gillian, before we get into today's story of money, I want to ask you, what is money anyway? |
| 0:37.3 | Great question, and people say it makes the world |
| 0:39.8 | go round, but the irony is it's also the most successful shared hallucination in human history. |
| 0:47.7 | It's a type of alcham, if you like. Well, we all pretend to agree that something that is intrinsically |
| 0:52.8 | worthless, like a slip of paper, |
| 0:55.1 | is actually worth something from a horse to a house. And it only works because we're confident |
| 1:01.9 | the next person will play this trust game too. So money is basically just a confidence game then. |
| 1:08.3 | It's literally just a printed IOU on a piece of paper or maybe |
| 1:11.6 | a shell that everybody hopes that wouldn't actually have to cash in because the value isn't |
| 1:17.2 | stored in a vault. It only magically becomes real at the exact moment you hand it to a stranger |
| 1:23.5 | who's gullible enough to trust it and give you something a return, like a service or, yeah, |
| 1:28.9 | some groceries. |
| 1:30.0 | Absolutely. |
| 1:30.9 | I mean, it's basically all about credit, which is the Latin word for to trust or he or she, |
| 1:35.5 | it trusts. |
| 1:36.8 | But beyond the philosophical question about trust and money, your question about what is money |
| 1:42.5 | really matters today? |
... |
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