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Basically, would there be chaos?

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closed as unclear what you're asking by Liath, Vandroiy, DonyorM, overactor, Vincent Nov 5 '14 at 15:42

Please clarify your specific problem or add additional details to highlight exactly what you need. As it's currently written, it’s hard to tell exactly what you're asking. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

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    $\begingroup$ Err. The question is now completely different from the original. Maybe figure out what exactly the question is first? (The old question was underdefined: would there be no state money, or a system that forbids money? The latter would be hard to define. To the new question, the answer is obviously yes. Humanity can recover from pretty destructive crises. But it too is underdefined, as it is unclear where exactly the monetary system "ends") $\endgroup$ – Vandroiy Nov 5 '14 at 14:21
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    $\begingroup$ Errrr, never mind, I guess I'll delete this. This is way to broad and confusing. $\endgroup$ – user2790 Nov 5 '14 at 14:28
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    $\begingroup$ @AryamanArora head into the Chat room chat.stackexchange.com/rooms/17213 there's usually a few people in there more than happy to help you shape your question :) (sorry I'm not - I'm a little busy at the moment) $\endgroup$ – Liath Nov 5 '14 at 14:44
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    $\begingroup$ @AryamanArora even if you delete this now, feel free to come back and have another try at it later. We always love new questions. $\endgroup$ – DonyorM Nov 5 '14 at 14:45
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    $\begingroup$ @Liath While a good point in general, not really helpful in this specific case as chat requires 20 rep. $\endgroup$ – a CVn Nov 5 '14 at 15:04
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Yes; Our monetary system is simply a shortcut.

Say you have five chickens, and need a cow.

  • Without money, you need to find someone who has a cow an needs five chickens.
  • With money, you sell the chickens for \$100 and buy a cow for \$100.

You can still trade without money; it's just harder. An interesting side effect of this is that it's unlikely a CEO could ever be paid 2000x his employees wages, just because it would be near impossible to trade 10000 chickens for 2000 cows. Without getting into intricacies of taxation and rulership, compensation would be more or less proportional to work done and trade would be for items of equal value.

It would result in a near instantaneous redistribution of wealth.

That being said, it's very hard to operate without currency. What would likely happen is another form of currency quickly replaces it. For example, in the Fallout universe Bottle Caps are the currency, and "Pre-War Money" is more of a curio or antique. An issue could be that one regions currency is not accepted in another, but that happens even now.

Humanity would survive, but our civilization would halt or regress. Only about 10% of money is real, as our entire economy is built around the concept of fractional reserve banking. We would almost certainly go through a period of anarchy. With no money, there's no police, no jails, no mass transportation, no fuel, etc. Major cities would be bloody hell as factions competed for resources. A city the size of NYC or San Francisco can't sustain its population without importing thousands of tons of food and supplies.

Small towns and rural areas would be the least affected. Traditional Amish communities for example would see almost no difference.

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  • $\begingroup$ You could have mentioned how credit works. Many "barter" societies simply work on credit. For your example, your cow gets you something else I can do for you, like help birthing your next calves or plowing that field. $\endgroup$ – PipperChip Nov 5 '14 at 20:25
  • $\begingroup$ From my experience with bartering, any credit is generally very short term (Drop off a cow, get chickens tomorrow), or effectively a money replacement. (like contributing to a pool of funds, where a cow is 1000barterbucks and a chicken is 200barterbucks) Any examples? $\endgroup$ – evandentremont Nov 5 '14 at 20:27
  • $\begingroup$ You end up with a "gift economy," something we don't see very often in today's world. See: en.wikipedia.org/wiki/Gift_economy $\endgroup$ – PipperChip Nov 5 '14 at 21:09
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    $\begingroup$ "just because it would be near impossible to trade 10000 chickens for 2000 cows." Bollocks, you haven't thought that through. A CEO would get paid X (say instead of 1 cow a year, 2000 cows)... and would be able to make any trades he wants in whatever quantities he wants. $\endgroup$ – NPSF3000 Aug 28 '15 at 0:35