I've heard a lot of different economists bullet point a few main ideas as to why money is necessary. However, I'd like to get an ultimate rundown list. What are the major reasons why money is necessary for a culture to thrive?

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    $\begingroup$ "Money" just means "a commonly accepted medium of exchange with a commonly agreed value", or something of that ilk. It could be walrus tusks, if the supply of tusks was stable and they were easily traded. Without a common medium of exchange how do you maintain "trade", and without trade how does your culture "thrive"? $\endgroup$
    – Hot Licks
    Dec 26 '18 at 2:21
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    $\begingroup$ Historians are extremely dubious of the concept of cultures “thriving.” $\endgroup$ Dec 26 '18 at 7:25

There are issues with this question as currently written.

I will attempt to offer a partial answer by responding with a different question. If money did not exist, how would governments in modern developed countries impose taxes?

Historically, rulers would impose taxes in kind: forcing peasants to serve in the army, or taking a portion of the harvest. This is not particularly easy to see how a modern government could achieve this in a politically acceptable fashion.

So if you can find a way to allow taxation without money, you have found a way for money to not be necessary in a modern developed country.

  1. Store of value.
  2. Medium of exchange.
  3. Unit of account.

I doubt one can easily think of a benefit offered by money not covered by one of 1-3.

I reccomend reading the experimental work done by Camera on the emergence of money in an experimental economy. Fascinating stuff.

Edit: Whoever added the hyperlink (I think Densep) ... thanks! It inspired me to also link Camera's website. If you look through his CV you will find a few other highly relevant, very interesting, and well executed papers.


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