Episode 679: You Asked For It : Planet Money We ponder the origins of money, the economics of Santa, and the business of cemeteries. Why? Because you asked.

Episode 679: You Asked For It

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And we're back - hour two of PLANET MONEY on the line. I'm Robert Smith. Last hour, we asked the question is bowling a sport? Lots of debate on that one. This hour, the mysteries of money. The mysteries of money, we're taking your phone calls. OK, let's go to listener on line three. You are on the air.

MATT HEATON: My name is Matt Heaton, and I'm in Medford, Mass.

SMITH: OK, Matt, what's your question for PLANET MONEY?

HEATON: Can I borrow 20 dollars?

SMITH: The answer's no.

HEATON: Oh well, can't blame a guy for trying.

SMITH: Really? We put out a call to our listeners - the smartest, most interesting people you will ever meet - and those are the questions we get? Hello, and welcome to PLANET MONEY. I'm Robert Smith. Today on the show, we turn our mics over to your questions. And I swear, they are interesting questions. We ponder origins of money, the economics of Santa and also cemeteries because - well, because you asked. But first, we've got to take a break, pay for some of this programming and check weather and traffic on the sevens. Do not change that channel.

UNIDENTIFIED MAN: PLANET MONEY and the following message are made possible by Squarespace. Whether you own a small business or just need a professional portfolio, you should showcase your passion. Squarespace has the tools and website templates that you need. Capture every detail of what makes your passion worth pursuing. Start your free trial today. Visit squarespace.com/planetmoney. You should.

SMITH: So a while ago, we were batting around story ideas. And we weren't really coming up with anything that was moving us. And so we put out a call on Twitter and Facebook and said, what do you want to hear? What questions do you have about economics? We sorted through the questions, and we called up our listeners, like Andrew Mitchell from Gainesville, Fla. He's a mechanical engineer.

ANDREW MITCHELL: My wife and I, we visit family in New Jersey all the time, and she has an aunt that died long before she was born. And we take pictures - we go and take pictures of her grave and send it to her grandmother down in Florida. And the cemetery is pretty old. And I was wondering, well, there's always a crew out there keeping it cut and looking nice and everything. But no one's buying new plots. There's no new money going into that cemetery. So how do cemeteries operate?

SMITH: Because it is odd to have something that in theory lasts forever. Forever's a long time for any business...

MITCHELL: ...Especially if there's no one there to pay for it.

SMITH: Jacob Goldstein is our cemetery correspondent.


SMITH: You are now. We sent you out. Did you actually go to a cemetery?

GOLDSTEIN: I did not go to a cemetery. However, I did find the author of the book, "Cemetery Law."

SMITH: Well, there you go.

GOLDSTEIN: Proof that there's an expert on everything. In this case, it's Tanya Marsh. She's a law professor at Wake Forest. And she said yes, Andrew, it is strange the way we do it here. In fact, it's kind of unusual.

TANYA MARSH: In most countries in Europe, you buy the right to use a grave for a particular period of time - 20 or 30 years, 50 years.

GOLDSTEIN: And after that, they dig up your bones, and they put them in the bone house. There are these fancy words for this I actually didn't know before I did this story. They are the charnel house or the ossuary.

SMITH: And is this just because Europe has been around so long, like, if they didn't do this there would just be bones all the way down?

GOLDSTEIN: Yeah, I think they have a better idea, like, of what it means to say, oh sure, we'll bury you and keep up the cemetery forever.

SMITH: Yeah, we're so hopeful in America.

MARSH: We're the ones who deviate. We came over here, and we said, look at all this land - we can give everybody a grave forever. And so they did.

GOLDSTEIN: Oh, is that a mistake?

MARSH: Yeah, it was a huge mistake.

SMITH: Watch?

GOLDSTEIN: Yeah, so, you know, essentially, in the law - this is in the law in most states - cemeteries are making this legal promise that is an anomaly - that's really unusual. You know, they are promising to do something forever - to mow the lawn forever, to keep up the fence forever. And she says it's easy enough to do this while you're still burying people. You know, someone pays for a plot, and you take some of that money and spend it on, you know, lawn care, etc.

SMITH: It's like a pyramid scheme a little bit.

GOLDSTEIN: Well, you could say that.

SMITH: You're paying for old plots with new people coming in.

GOLDSTEIN: Sure. If you were a less cynical person, you might say, you know, it's like - think about it like work and retirement, right?

SMITH: Yeah, OK.

GOLDSTEIN: So, like, the part where the cemetery is still filling up, that's like your working life. When the cemetery is full, that's like retirement, although in this case, you've got to retire forever. You're never going to die. You've got to keep the cemetery going forever. But cemeteries do what we do for retirement. While they're working - in this case, while they're filling up with new dead people - they save money. So this is often regulated by the state. For example, in the state of New Jersey, where Andrew's wife's aunt is buried, the state requires that cemeteries put aside 15 percent of the cost of a new grave, put that into this perpetual care fund. So they say, you've got to set that money aside. You can't touch the principle. And then forever, you know, once your cemetery is full you will have this stream of interest to, say, pay people to cut the lawn. I should say this doesn't apply to religious cemeteries. But a lot of religious cemeteries do the same thing, even though they're not regulated by the state.

SMITH: So when our listener, Andrew Mitchell, sees those guys mowing that old cemetery - a cemetery where they're clearly not getting any new customers - they're in theory, perhaps, being paid by some investment from long ago.

GOLDSTEIN: Yeah, that's exactly right.

SMITH: But that probably doesn't always work out, as we know, when you try and invest for the long run - meaning forever. Sometimes you don't have the money to do it.

GOLDSTEIN: Definitely. And one of the reasons Tanya Marsh, that law professor, says it's a mistake to make this permanent promise is cemeteries do go bankrupt. She says it happens a lot. You know, we don't hear about it because they're little things, but they don't invest right, they don't have enough money saved, and they just don't have enough money to pay to keep the cemetery up.

SMITH: There you go. Thank you, Jacob.

GOLDSTEIN: Thanks, Robert.

SMITH: I'm going to bring in David Kestenbaum for this next question.


SMITH: Hey, listen to this one.

LAURA: I'm Laura. I'm from Harrisburg, Pa.

SMITH: And what was your question for PLANET MONEY?

LAURA: Was there or is there a society that manages to exist without money?

SMITH: Now, I should say here that Laura works in the financial industry. And she and her husband were talking about this question, and she went down one of those rabbit holes that we always go down here at PLANET MONEY because she's, like, wait, what does it even mean, money? Is it currency, or is it debt that you owe each other? And she says they spent the whole weekend trying to find an answer to this question.

LAURA: I'm embarrassed to give my last name...

SMITH: Why not?

LAURA: ...Because I don't think I know what money is anymore after this.

SMITH: This is what happens when you think about money too long (laughter).

KESTENBAUM: I picked this question, Robert, because I love it. I mean, clearly, like, there was a time before money. There was a time before dollar bills. There was a time before gold coins, right? But was there a time or group of people who didn't even engage in any kind of exchange - like, no trade at all? I think that is the most basic form of kind of money-ish things is trading, right? So that is the question I decided to try and answer - like, was there a group of people now or has there ever been, that just did not even trade? And this is a hard question to answer. You know, you're saying, like, how do you know if some ancient civilization thousands of years ago traded? Turns out there is a way to try and answer this question. What you do is you take some archaeological site, dig around in the ruins, and you look for something that had to have come from really far away. For instance, if you look in a very, very old Egyptian relations, you find this peculiar stone called lapis.

JOE MANNING: Lapis is this very beautiful blue stone. (Laughter) That's not very technical.

KESTENBAUM: This is Joe Manning, a professor at Yale. The key thing about lapis, he says, is that it does not occur naturally in Egypt. You know where you do find it?

SMITH: Where?

KESTENBAUM: Afghanistan.

MANNING: It's a province in the northeastern part of Afghanistan - Badakhshan, it looks like. I'm just looking it up now.

KESTENBAUM: So thousands and thousands of miles away.

MANNING: I don't know the mileage from northeastern Afghanistan, but it's pretty far.

KESTENBAUM: And what year are we talking here? What years? What time period?

MANNING: It's certainly in Egypt from the very beginning of Egyptian civilization. It's recorded in neolithic burials, though, in the seventh and seventh and sixth millennium B.C., so 6000 B.C.

KESTENBAUM: That is a long time ago.

SMITH: This is a long time ago. And I mean, I suppose, in theory, someone could have picked up this stone and accidentally dropped it in another place, but it does speak to the theory that there was some sort of actual trade. Somebody got something, and somebody got something else and they perhaps exchanged it.

KESTENBAUM: Yeah or a trade network. I mean, this is very long distances. And you find not just one of these stones, but many of these stones very far from the source. This is a really long time ago, right? We're talking about, like, the end of the Stone Age. And everywhere you look you see examples like this. So that is all evidence for trade and that trade goes way, way, way back.

SMITH: But that doesn't mean that it never happened, that there wasn't just a group of people who were like, you know what, we're good. We have everything. We live, you know, on the shores of this river. We have everything we need to eat. We have everything we need to build. That could have been, in theory, a civilization without money or trade.

KESTENBAUM: Yeah. So I said, like, have we ever found, like, records from some civilization where they're like - life is going really great without trade, killed an elk today. I'm so glad I don't have to exchange with - you know, like, there's nothing. There's nothing like that. What I started to get worried about was that we would run this story, and someone's going to say, well, there's actually a tribe in the Amazon right now that doesn't do trade. So I found a guy who'd hung out with a group of people in the Amazon. His name is Joe Henrich. He's at Harvard. And the group of people he spent time with are called the Machiguenga. He says traditionally, they don't have money. When he went there, there was no formal marketplace for exchanging stuff. But he told me this story about one day he was hanging out with them, and they make a visit to this neighboring village. And they brought along with them these clothes they had made called cushmas.

JOSEPH HENRICH: They didn't show up and say OK, I have three cushmas here. I need you know, a parrot feather, a new bowstring and something - you know, there wasn't that kind of thing. But they came with a cushma, and they left with different stuff. So there was a flow of goods.

KESTENBAUM: That seems like trade to you?


KESTENBAUM: I talked to four different experts. None of them could name a group or a civilization that they knew had gotten by without trade. As far as I can tell, trade is something that's just like math or music. Like, it just happens. It is an obvious idea because you do not usually have everything you want or you need, and someone else has that thing, and this is how you get it.


SMITH: All right. Thanks, David.

KESTENBAUM: You're welcome. Can I say one more thing?

SMITH: Yeah.

KESTENBAUM: I asked all these professors I talked to this question that none of them really knew what to make of. I said OK, imagine that we encounter some alien civilization, like, flying saucer comes down, doors open, alien walks out. Do they have money?

SMITH: I guess, like, something that complicated as space travel and...

KESTENBAUM: How else do you build a spaceship, right?

SMITH: No single creature anywhere in the universe could probably build that by themselves.

KESTENBAUM: Maybe they're, like, are a post-competitive civilization. They just share and build things together.

SMITH: Still, there's somebody who's good at the doors and somebody who's good at the engines.

KESTENBAUM: (Laughter).

SMITH: Ladies and gentlemen, David Kestenbaum. Thanks.

KESTENBAUM: Going to go work on my spaceship.

SMITH: One of the things I love about these listener questions is a lot of them came from people who are actual experts in economics. Here, let's listen to this one.

BENJAMIN HANSEN: My name is Benjamin Hansen. I'm an associate professor of economics at the University of Oregon. My question for PLANET MONEY is - does Christmas and the holiday shopping season - does that actually increase output, or does it just shift it dynamically?

SMITH: Now, you actually teach economics right?


SMITH: Can't you just open the textbook and look this up?

HANSEN: Well (laughter), so I haven't found a holiday shopping textbook yet.

SMITH: It basically involves a very difficult what-if, which is - what if there were no Christmas? It's like a (laughter) like a horrible, really sad children's special.

STACEY VANEK SMITH, BYLINE: If you're bad this year.

SMITH: Ladies and gentlemen, Stacey Vanek Smith, how did you answer this question?

VANEK SMITH: So to look at the economic impact of Christmas, I went right into the belly of the beast. I went to a toy store, and I talked to Ezra Ishik (ph). He owns a toy store called Mary Arnold Toys in Manhattan. How long have you worked here?

EZRA ISHIK: Thirty-nine years.

VANEK SMITH: Do you like Christmas?

ISHIK: I dread it. I've been doing it for too long.

VANEK SMITH: So, Ezra says between Thanksgiving and Christmas, he puts in 15-hour days, he doesn't have a day off, and it's expensive. He hires two gift wrappers and a trucker, and all of his workers put in a ton of overtime. So he says it's stressful, and it's awful. You have to make these bets on which toy's going to be the hot toy or not. But he does all of this because spending between Thanksgiving and Christmas, he says, is 25 to 30 percent of his income for the whole year. And he said if Christmas went away, it would be terrible for his business. Do you think that if there weren't Christmas that people would spend as much on toys?

ISHIK: No, I don't think they would. Let me give you one example. This lady, she bought four big bags, like $1,000.


ISHIK: Of toys, which is not very unusual.


ISHIK: Yeah.


SMITH: So of course, this raises the obvious question. Yes, yes, yes, it's great for toy - it's a great transfer of wealth to the toy industry. But if you didn't have Christmas, there would be lots of things you could spend that money on. You would have - that woman would have thousands of dollars to spend it on movies or books or whatever she wants to do, vacations.

VANEK SMITH: Yes, I talked to economist Joel Waldfogel about this. He's done a lot of economic studies about the holidays. And he told me a lot of the stuff we buy around Christmas is stuff we would buy anyway but not all of it.

JOEL WALDFOGEL: A whole bunch of the gifts we give are, like, stuff we give our kids that they need. All that stuff would still get bought. And even the stuff that they kind of want but don't need to the extent that we're rich enough that we would get it for them anyways, all that stuff would happen. But there's another category of recipient. So we're going to visit, you know, the in-laws on the holidays. There's an obligation to bring a gift. Those are gifts that wouldn't happen in the absence of the holidays.

SMITH: So if I spend, let's say, $1,000 on various gifts over the holidays, and Christmas disappears, and so I have that $1,000 burning a hole in my pocket, let's say, to spend on other things. Will I spend all of it?

VANEK SMITH: Yeah, Joel says you'll probably spend a lot of it but not all of it. Some of it you'll save. And he says without Christmas, if Christmas went away, savings would probably go up overall.

SMITH: So we know this from times in the economy where people somehow get extra money. Like, gas prices go down...


SMITH: ...They all of a sudden have couple extra hundred dollars a month. We found that people do not spend all of it.

VANEK SMITH: They spend some of it, but they also save some of it.

SMITH: So to answer the listener's question, if we were to abolish Christmas, toy industry might take a little bit a hit, but people would save that money or spend it at other times of the year.

VANEK SMITH: Yeah, yeah, that's right.

SMITH: So let's do it. Let's just abolish Christmas.

VANEK SMITH: You can't abolish Christmas.

SMITH: Yes, yes, I can. It is done.

VANEK SMITH: (Laughter) Somebody already tried that, and it did not work out, thanks to the Whos in Whoville.

SMITH: My heart has grown three sizes during my interview with you. Stacey Vanek Smith, thanks.

VANEK SMITH: Thanks, Robert.


SMITH: Before we end the show, I do feel bad about something. I was pretty dismissive of our very first caller, Matt Heaton, who you may recall asked this question.

HEATON: Can I borrow $20?

SMITH: And I know he was joking, but when we thought about it, it is an actual good question. It is hard to borrow small sums of money because of transaction costs. And so we reconsidered. How much interest would you would be willing to pay on $20 loan?

HEATON: Probably not a whole lot.

SMITH: So, like, 5 percent interest?


SMITH: And then we have to check your credit. What's your job?

HEATON: I'm a musician (laughter).

SMITH: Come on, a musician?

HEATON: (Unintelligible).

SMITH: I'm going to have to up this to 10 percent, 10 percent interest for being a musician.

HEATON: (Laughter) Oh man, just because of my profession?

SMITH: I'm sorry. That's the way it works. You know that.

HEATON: Yes, I do.

SMITH: So if we send you 20 bucks, will you send us 22 bucks back in a year?

HEATON: Yes, I will.


SMITH: There you go. Matt Heaton plays kids music, by the way. Here is one of his songs. PLANET MONEY is an investor now.


HEATON: (Singing) When everybody here came from someplace else, everybody here came from someplace else. Everybody here came from someplace else. Everybody here came from someplace else. I know because I did it myself, and I'm happy that you made it here.

VANEK SMITH: Hey, we wanted to thank everyone who asked a question who didn't make it into the show. Keep your questions coming. We do read every one, and we want more, especially questions about your own life. So if there is a mystery that's perplexing everyone in your industry, is there a running economics debate at your office that no one can settle, or perhaps some sort of existential question about your job, we would love to hear your questions. Lay it on us. And you can email us at planetmoney@npr.org. Put question in the subject line. Or you can reach out anytime on Facebook or Twitter. And no, we are not lending any more money. Our episode today was produced by Nick Fountain. Thanks for listening to PLANET MONEY. If you are an undiscovered musician looking for your big break, we have an opportunity for you. Check out NPR Music's Tiny Desk contest. Just send a video of you playing an original song at a desk, and you could win the chance to play at NPR's famous Tiny Desk concert. Enter by February 2 at npr.org/tinydeskcontest. I'm Robert Smith. Stay tuned next hour. We're going to be talking Super Bowl strategies after this break. For weather and traffic on the sevens, PLANET MONEY on the line, your phone calls, your questions, your answers.


HEATON: (Singing) Well, I'm happy that you made it, happy that you made it, happy that you made it, happy that you made it, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy, happy. I'm happy that you made it ever so, happy that you made it here.

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