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Comment by Uptrenda | Hacker News Reader

It's a strange idea that we're come to accept money as being a necessary prerequisite for the exchange of utility but that's not always the case.

Let me know what you think.

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I don't think its so strange at all. Money eliminates the double necessity of wants bartering requires. For example, in a barter economy, a cobbler could only get milk as often as a dairy farmer needs shoes. The fact that we trade money as opposed to goods allows people to develop specialized skill sets.

Also money is easier to store than favours

But perhaps not as valuable

Depends who owes you favours ;)

Money is favors owed recorded on paper.

No one thinks it's necessary; it's just fungible and storable, and therefore more practical than barter.

Value-matching with barter is really hard. Maybe I'm a neurosurgeon and I want to buy some novelty shot glasses. Must I perform neurosurgery for the shot glass salesman? That's a very asymmetric trade.

Maybe you can advice about neurosurgery, and in return get what you want. I like about these is that it avoid taxes, and that's always a plus.

You're expected to pay tax on the value of barter in many places. Not sure about the US but in Canada you are.

Not that anyone does, but if the CRA comes knocking you could be in trouble. :)

In the US this is incorrect, it's classified as barter income: http://www.irs.gov/taxtopics/tc420.html

"An example of bartering is a plumber exchanging plumbing services for the dental services of a dentist. You must include in gross income in the year of receipt the fair market value of goods or services received from bartering."

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