2005
Writing Contest: First Place
Song: "Diamonds Are a Girl's Best Friend" (Marilyn Monroe)
Though we think of money in terms of dollar bills and coins, that is far too narrow a
definition. When Marilyn Monroe sang about her favorite piece of jewelry in Gentlemen Prefer
Blondes, she may not have been singing about greenbacks or U.S. banknotes, but she was most
definitely singing about money. The basic principles of economics state that in order for
something to be considered money, it must satisfy three criteria. The item in question must serve
as a medium of exchange, be a unit of account, and be a store of value. If all of these
requirements are met, then what you have is money, and diamonds are clearly no exception to
this rule.
Let us examine criterion number one: the item must serve as a medium of exchange.
This means that an object must have the ability to be used in trade or exchange for other items.
Marilyn sings that "A kiss may be grand, but it won't pay the rental." While a kiss could not be
accepted as payment and therefore cannot serve as a medium of exchange, a diamond, worth a
certain amount, can be. Because a diamond is considered to have a lot of worth in our standard
money system, you could very well pay debts with it. Whomever you traded with could then
convert this diamond into other goods or fiat money. These characteristics satisfy condition
number one in determining whether something is money.
The second criterion states that the item must be a unit of account. This means that the
value of a good can be used to measure or compare the value of other goods. Generally, to have
this property, an item must be able to be broken down into various groups. In the song, Marilyn
cites both pear-shaped and square-cut diamonds. Because of the amount of labor that goes into
producing either of these cuts, the price of the diamond varies, much as a ten-dollar bill varies
from a fifty-dollar bill. These can then be broken down even further, depending on the number
of carats that make up the diamond. This is like a dollar being broken down into cents. Each
size and cut of diamond has a designated value; therefore, the second condition for money is
satisfied.
The third criterion for money is that an item must be a store of value. This means that
any item that could be called money must be reliably convertible into other goods through trade
at some future date. The song states that "Men grow cold as girls grow old." This statement
shows that girls, or people in general, are not a store of value because their worth changes with
their age. Conversely, she says that "square-cut or pear-shaped, these rocks don't lose their
shape," showing that the value of diamonds does not change over time. They keep their shape,
meaning that they keep a consistent worth regardless of other conditions, and that they can
reliably be converted into other goods through trade. This proves that the third and final criteria
for money are also satisfied by the diamond.
Though we will most likely always associate money with images of green dollar bills and
silver-faced coins, it is important to realize that these things represent only a very narrow
spectrum in the world of money. I may trade a necklace for concert tickets, you may trade in
your car for a new one, or Marilyn Monroe may trade her diamonds to pay the rent on her
humble flat. In each case, money is being utilized, even if it may not look like money to us. As
long as something can be exchanged, saved, and compared to other goods, then it can be called
money. Though, as Marilyn says, "We all lose our charms in the end," money will never tarnish
in the eyes of society and ever remains the exception to the rule.
"Essential Characteristics of Money." Money: General Definition of Money. Wikipedia.
20 Feb 2005. http://www.masterliness.com/a/Money.htm.
nzgirl-Diamonds are a Girl's Best Friend, Marilyn Monroe. Centralstation. 14 Feb 2005
http://nzgirl.co.nz/articles/1547.