First, such systems only work in the presence of a unit of account, because otherwise it's impossible to coherently price items in a pure unlike-for-unlike barter system. The unit of account would, of course, be money. So what you're talking about isn't a collapse of the money system, but black markets. When you say "people who want to keep their transactions off the books will use black markets," it sounds much less prophetic.
Second, the value of state money is maintained by the state's ability to levy taxes, and the state only accepts tax payments in its own money. For people living "on the grid" in a country with a credible government, this means that most of their economic action has to happen in the state's money. Since people have to, at the very least, acquire enough money to pay their taxes, and most people don't want to put up with multiple systems of exchange.
Not coincidentally, this is also the biggest hurdle for serious adoption of cryptocurrencies.
It is not a hurdle. In fact Bitcoin's growing adoption and increase of value over the last eight years has already demonstrated your worry is a non-problem. Money has value because people demand it. It doesn't matter if demand comes from the government or a merchant. Both can change their mind about what they'll accept tomorrow as money (as history has shown many, many times.)
Sure, on a practical level a currency's value will have a more solid foundation if (1) the government that demands taxes is big and stable, or (2) if a large number of merchant accepts it. But again, fundamentally there is no difference between (1) and (2). Multiple cryptocurrencies already have value resting on a more solid foundation than the value of currencies in many smaller countries.
>Second, the value of state money is maintained by the state's ability to levy taxes
Does that also hold when the state allows the vast majority of the transactions within the state to be mediated by banks and payment processors who charge a proportional "processing fee" on every single transaction which becomes essentially indistinguishable from a tax? Does that not put banks in the position of having as much, or at least nearly so, control over the value of the money of that state?
The existence of other necessary service providers who also.demans payment in the government's preferred currency is an additional source of support for currency value, not a countervailing force.
And it's often largely a secondary product of the government requiring the use of the currnecy, anyway, especially when they are heavily regulated creatures of law, like banking corporations.
Shit. You just made me realize something. This would be bliss and perfection and salvation for the current status quo. The Internet has come along and taken distribution, the source of basically every existing accumulation of significant wealth, and made it a worthless problem to solve. It took the primary economic engine, something only huge sophisticated organizations were capable of accomplishing with any effectiveness, and turned it into something any clever 12 year old can do in their spare time for a lark and run circles around those large organizations whose pre-existing distribution chains are now a weight drowning them.
They feel that noose tightening and know their days are numbered unless they can stop things from progressing any further. The death of any not-in-person transactions, especially any transactions over the Internet, would give them rebirth. Their distribution networks would once again be the single most valuable structure in the entire economy. They could continue to skim 90% of every transaction between creator and consumer for performing the long-valued task of distribution.
Shit.
What you end up with is informal system of money transfer such as https://en.wikipedia.org/wiki/Hawala
Such a system will emerge as soon as people are prohibited to pay directly to each other. Instead of paying cash to you, I will pay for you in restaurant.
Look at how the underground economy of drugs uses commodities like detergent [1]. This would just take that economy to the next level. Clearly to prevent currency from failing outright, going cashless would likely result in the ban (effective or not) of cryptocurrencies and the like.
[1] http://nymag.com/news/features/tide-detergent-drugs-2013-1/
Of course such currencies are economically inefficient. But I think too much monetary efficiency is bad, because it encourages financialization and excess risk. for generations now we have been borrowing from our descendants to pay for things in the present, seeming to come out ahead on paper but more often than not running up a hideous and poorly-accounted-for environmental bill while establishing a consumption-based economy that promotes waste. I've long wondered if we shouldn't treat oil as a de facto currency rather than only as a commodity.
And if you can't sell it, you've still got clean clothes.
The US government also expects your tax payment on an annual basis.
1. When my girlfriend pays me her half for getting groceries.
2. Which I then use to feed the laundry card refill machine in my apartment.
Mind you, I don't want cash to go away, but yes, I essentially live in a cashless society.
Describing gold as an incredibly popular currency makes alternative-facts look honest.
...
A currency is a store of value, but a store of value is not necessarily a currency. Gold, as a currency, has terrible properties.
In what societies have humans used barter?
I suspect we would instead use something like tobacco, laundry detergent, or startup t-shirts as cash or we would keep a mental register of who owes whom a favor.
All of them, including (but not limited to, since barter predates money) all the ones that also have a money economy.
And the question was about using barter, not depending on barter exclusively; every society has used barter.
And, in any case, debt and barter are not opposed; a system that uses debt of arbitrary commodities without a commonly-accepted unit of account is still a barter system (barter systems with debt certainly have existed, whether or not they were ever the dominant basis for any economy.)
And it depends on what you mean by "depended on". The central authorities of the day maybe preferred to rely on financial tools, but the people themselves performed a non-insignificant amount of commerce using barter.
"2 knicks on this clay tablet reminds me that I gave Tom two bushels of wheat, and Tom will return to me 2 pelts," contrived example to make the point aside, such scenarios as I understand it, were (and are) pretty common.
It depends on what context you're looking from. Bankers might say it's a ridiculous, outdated notion, and sell the idea it's never really existed. Poor people might say yeah well, it's all we really have.
Almost all of them to some degree. Including modern societies (at rural places), especially up until the sixties or so, and even Western European cities (during the war and the very poor years post war).
Also common in communist countries...
How is that relevant? I've lived in a country that wasn't communist, but had a whole communist vs right/centre civil war. And I've visited a number of ex-communist countries, and know people from there.
But this is not about what I've seen with my eyes, it's about what's recorded in history.
Note also that I didn't say "preferred" (as in making barter the dominant and/or official economy).
Barter was very common in communist countries for "black market" stuff (and in times of great crisis, for essentials).
Here's from Wikipedia, about the aftermath of the revolution in USSR:
Civil War ensued and the economy of the new regime became even more chaotic. With mismanagement rampant and hunger sweeping the land, the value of the ruble, currency of the nation, essentially collapsed.[1] During this interval, remembered by the name War Communism, money lost its function as a store of value and a means of exchange. A return was made by people in their daily lives to a _primitive barter economy_ (emphasis mine)
Also here are some more modern examples: https://www.forbes.com/sites/timworstall/2016/12/16/another-...
And one not related to communism (as I wrote, barter was used in Western Europe and many other places as well, in rural societies, but also in times of inflation/depression): http://www.naturalnews.com/052224_economic_collapse_Venezuel...
http://www.europeanpaymentscouncil.eu/index.cfm/newsletter/a...
"Although selected shops, petrol stations, railway stations and government services, each for their own reasons, have decided not to accept cash any longer, we do not foresee the Netherlands will evolve into a completely cashless society. In fact, the consensus is that the cash infrastructure will remain ubiquitous and that it is up to payers and payees to agree on their payment method."
That said, it's not hard to imagine that if you get to 90% or 95% cashless, a lot of retailers aren't going to want to bother with cash any longer.
Old school accounting in many parts of the world did not rely on financial transactions. Central authorities preferred "proper" financial instruments, but for the commoner, bartering was a regular activity.
Knicks on clay tablets tracked debt, sure, but the repayment may not have been via money. 2 pelts to Bill now for a bushel of grain in return next month type agreements are all over history.
It's hard to determine how much activity like this there was, and a lot of the history focused on official financial systems because, well, it's easy to find data on.