<blockquote>
<p>Is it principally and theoretically possible to remove money from economy?</p>
</blockquote>
<p>Trivially, it is theoretically possible. Most microeconomic theoretical models do not even have money in them (e.g. see MWG Microeconomic Theory for numerous examples).</p>
<p>In case you are not using theory in its proper meaning, it is also conceivable such policy could be implemented, provided there is state with sufficiently strong police enforcement that would be able to prevent people to reverting to commodity money after state money is abolished.</p>
<blockquote>
<p>If so does that help with stopping economical inequality, ... though the possibility of wealth-accumulation is removed in the formal sense of the word?</p>
</blockquote>
<p>Removing money does not affect ability to accumulate wealth per se. Wealth is by definition net value of asset someone owns. Without money people can still accumulate assets by exchanging goods and services for them.</p>
<p>However, since money is a technology that helps modern economy operate smoothly by removing need for double coincidence of want, through serving as medium of exchange, serving as a unit for accounting, and convenient store of value over time (Mankiw Macroeconomics pp 80-81), without money efficient modern industrial economy would likely not be possible.</p>
<p>Given that wealth is created by saving past income and everyone's income would drop significantly there will be for sure less wealth inequality. Someone's income can't be negative, and although wealth can be in principle negative (if someone has more liabilities than assets), allowing for bankruptcy as virtually every country does, there is also some effective lowest bound beyond which wealth cannot drop. As a consequence making virtually everyone poorer makes also everyone more equal. As to whether that somehow liberates people or not that is a question that is outside economics.</p>
<blockquote>
<p>What would be the critique of such proposal?</p>
</blockquote>
<p>Critique is that it would make virtually everyone significantly poorer. Money basically just smooths transactions. If you are hungry teacher you don't need to search for cook with children who have need of a teacher. If you remove them you will force people to incur additional search costs that they did not have to do before. As a consequence less productive and useful work will be done and society will have less output (i.e. income) and since wealth is just saved income also less wealth over time.</p>
<p>Also, such additional costs would likely make it impossible for some highly specialized professions to exist. For example, there is unlikely to be a sufficiently diverse pool of people needing neurosurgery that could support needs of neurosurgeon on pure barter bases. Economy would thus revert to some earlier, likely pre-industrial stage.</p>
<blockquote>
<p>What are the main assumptions of such proposals.</p>
</blockquote>
<p>You are not proposing some mechanism or theoretical model. Only assumption necessary is that government has strong enough military and police and good enough surveillance capability that it can enforce such measure on population and prevent people from creating money. This requires high levels of surveillance and enforcement since even in POW WW2 camps people were able to create private commodity money by using cigarettes and other coveted items (see <a href="https://www.jstor.org/stable/2550133" rel="nofollow noreferrer">Radford 1945</a>). Hence empirically you need more surveillance and enforcement than a WW2 POW camp would have, and hence you have to assume government has such high levels of surveillance and enforcement at its discretion.</p>

CC BY-SA 4.0
2023-12-16T22:41:19.283Z
2023-12-16T22:41:19.283Z
1muflon1
<p>As an outsider I have a few questions non-monetary economy.</p>
<p>Is it principally and theoretically possible to remove money from economy?</p>
<p>If so does that help with stopping economical inequality, where liberty of human is not limited though the possibility of wealth-accumulation is removed in the formal sense of the word?</p>
<p>What would be the critique of such proposal?</p>
<p>What are the main assumptions of such proposals.</p>

CC BY-SA 4.0
2023-12-16T15:31:03.290Z
Hi! 1. You do not define a lot of your concepts, e.g.; I don't know what you mean by "*ossibility of wealth-accumulation is removed in the formal sense of the word*".
Giskard
CC BY-SA 4.0
2023-12-16T15:31:54.967Z
2. Such a monumental undertaking (removing money from a modern economy) has never been attempted, so any answers will be mostly opinion-based. Questions that can only be answered with opinions are off topic here.
Giskard
CC BY-SA 4.0
2023-12-16T15:33:42.873Z
3. You ask several different questions, which is bad, because maybe someone can answer one, but not the others. E.g.; your third question, "*What would be the critique of such proposal?*" is actually answerable. Your fourth question "*What are the main assumptions of such proposals.*" is again mostly unclear (what do you consider to be "such"), and a different question.
Giskard
CC BY-SA 4.0
2023-12-16T15:34:32.870Z
Please edit your question in such a way that these problems are resolved, so there are not several different questions in it, the concepts used are defined, and a non-opinion based answer to the question is possible. Thank you!
Giskard
CC BY-SA 4.0
2023-12-16T20:13:07.057Z
Well honestly it's not my field of expertise but I can definitely imagine many different ways to think of wealth-accumulation formally depending on how much math one knows. I definitely am sure there's enough concept in the field to be formulate such concept. I don't think the question is opnioin based as there are theoretical models for non-monetary Economics and in general answering even one of the questions or a general answer is acceptable for me as an outsider. @Giskard
Bastam Tajik
CC BY-SA 4.0
2023-12-17T14:09:15.003Z
A "barter" economy does not use money, people simply exchange goods (e.g. I'll trade you ten apples for five pears). But these are very primitive and probably don't exist today.
Daniel
<money><political-economy>
Is non-monetary economy formally possible?
Bastam Tajik
# Is non-monetary economy formally possible?

(Asked by: username_0 on 2023-12-16)

As an outsider I have a few questions non-monetary economy.

Is it principally and theoretically possible to remove money from economy?

If so does that help with stopping economical inequality, where liberty of human is not limited though the possibility of wealth-accumulation is removed in the formal sense of the word?

What would be the critique of such proposal?

What are the main assumptions of such proposals.

**Tags:** money, political-economy

> **Comments:**
> **username_1**: Hi! 1. You do not define a lot of your concepts, e.g.; I don't know what you mean by "*ossibility of wealth-accumulation is removed in the formal sense of the word*".  
> **username_1**: 2. Such a monumental undertaking (removing money from a modern economy) has never been attempted, so any answers will be mostly opinion-based. Questions that can only be answered with opinions are off topic here.  
> **username_1**: 3. You ask several different questions, which is bad, because maybe someone can answer one, but not the others. E.g.; your third question, "*What would be the critique of such proposal?*" is actually answerable. Your fourth question "*What are the main assumptions of such proposals.*" is again mostly unclear (what do you consider to be "such"), and a different question.  
> **username_1**: Please edit your question in such a way that these problems are resolved, so there are not several different questions in it, the concepts used are defined, and a non-opinion based answer to the question is possible. Thank you!  
> **username_0**: Well honestly it's not my field of expertise but I can definitely imagine many different ways to think of wealth-accumulation formally depending on how much math one knows. I definitely am sure there's enough concept in the field to be formulate such concept. I don't think the question is opnioin based as there are theoretical models for non-monetary Economics and in general answering even one of the questions or a general answer is acceptable for me as an outsider. @username_1  
> **username_2**: A "barter" economy does not use money, people simply exchange goods (e.g. I'll trade you ten apples for five pears). But these are very primitive and probably don't exist today.  

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## 1 answers

### Answer by username_3 on 2023-12-16. Score: 2

> Is it principally and theoretically possible to remove money from economy?

Trivially, it is theoretically possible. Most microeconomic theoretical models do not even have money in them (e.g. see MWG Microeconomic Theory for numerous examples).

In case you are not using theory in its proper meaning, it is also conceivable such policy could be implemented, provided there is state with sufficiently strong police enforcement that would be able to prevent people to reverting to commodity money after state money is abolished.

> If so does that help with stopping economical inequality, ... though the possibility of wealth-accumulation is removed in the formal sense of the word?

Removing money does not affect ability to accumulate wealth per se. Wealth is by definition net value of asset someone owns. Without money people can still accumulate assets by exchanging goods and services for them.

However, since money is a technology that helps modern economy operate smoothly by removing need for double coincidence of want, through serving as medium of exchange, serving as a unit for accounting, and convenient store of value over time (Mankiw Macroeconomics pp 80-81), without money efficient modern industrial economy would likely not be possible.

Given that wealth is created by saving past income and everyone's income would drop significantly there will be for sure less wealth inequality. Someone's income can't be negative, and although wealth can be in principle negative (if someone has more liabilities than assets), allowing for bankruptcy as virtually every country does, there is also some effective lowest bound beyond which wealth cannot drop. As a consequence making virtually everyone poorer makes also everyone more equal. As to whether that somehow liberates people or not that is a question that is outside economics.

> What would be the critique of such proposal?

Critique is that it would make virtually everyone significantly poorer. Money basically just smooths transactions. If you are hungry teacher you don't need to search for cook with children who have need of a teacher. If you remove them you will force people to incur additional search costs that they did not have to do before. As a consequence less productive and useful work will be done and society will have less output (i.e. income) and since wealth is just saved income also less wealth over time.

Also, such additional costs would likely make it impossible for some highly specialized professions to exist. For example, there is unlikely to be a sufficiently diverse pool of people needing neurosurgery that could support needs of neurosurgeon on pure barter bases. Economy would thus revert to some earlier, likely pre-industrial stage.

> What are the main assumptions of such proposals.

You are not proposing some mechanism or theoretical model. Only assumption necessary is that government has strong enough military and police and good enough surveillance capability that it can enforce such measure on population and prevent people from creating money. This requires high levels of surveillance and enforcement since even in POW WW2 camps people were able to create private commodity money by using cigarettes and other coveted items (see [Radford 1945](https://www.jstor.org/stable/2550133)). Hence empirically you need more surveillance and enforcement than a WW2 POW camp would have, and hence you have to assume government has such high levels of surveillance and enforcement at its discretion.


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