Leonardas Marcinkevičius // 27 May 2025

Imagine a world without money. There would be no more wars because resources would belong to all of humanity. Governments would ensure equal and just distribution of goods. Competition, egoism, banks, and capitalist greed would vanish. People would work not for pay, but to serve one another. There would be no more stress, debt, or struggle to make ends meet. It’s a familiar vision, not displayed in any art gallery, yet rediscovered time and again in the rhetoric of utopian communist thinkers.

Throughout history, there have been attempts to break free from the constraints imposed by money. In recent years, new proposals have emerged, from universal basic income to central bank digital currencies. These have been promoted as tools for building a ‘more efficient’ monetary system. However, we’ve already seen the consequences of trying to escape the limits of money: following the pandemic, we witnessed record-high inflation triggered by large-scale ‘money printing’.

Money often frustrates us because it symbolises limitation. We want more than we can afford, and that’s irritating. For instance, I’d like to buy a new phone and take a vacation to my dream destination. But when I calculate my savings, I realise I can choose only one. This feels restrictive. Similarly, a company director might want to raise salaries and invest in new technologies. However, after reviewing the budget, a choice must be made – funds can only be allocated in one direction. Even politicians can’t finance everything at once – they must choose between increasing social benefits, raising pensions or, in light of global tensions, expanding the defense budget. Money is a constant reminder: resources are finite.

But what if we removed this irritating symbol of scarcity? What if money disappeared overnight? Suddenly, we’d be left guessing whether we could actually obtain the goods we desire. It would soon become clear that scarcity – the shortage of desired goods – can manifest in the most unexpected ways. We’d find that there aren’t enough hotel rooms, because everyone wants to go on vacation. Once there, eating at a restaurant would be nearly impossible – there would not be enough staff to serve everyone. They would be on vacation too.

Even if everything became ‘free’, limitations would still be everywhere. The difference? It would no longer be clear, predictable, or measurable. Life would become a constant source of stress and uncertainty.
That’s why we must understand: money has never been the cause of scarcity – it merely reflects it. It helps us manage and optimise our limited resources. Money provides structure – it is a system for organising choices and decisions. Without it, economic life would turn chaotic. Employees wouldn’t know how much they were earning. Suppliers wouldn’t know if their partners could settle payments. It is this clear, quantified pressure – expressed in money – that brings clarity, peace of mind, and efficiency. If your budget shows that you can afford something, you can be confident in your decision to spend.

Let’s dig deeper. Without money, one of the greatest problems would be inefficiencies in trade. For an exchange to occur, there must be a ‘double coincidence of wants’ – both parties must want what the other has. A farmer with wheat who wants shoes must find a shoemaker who, at that moment, wants wheat, not vegetables or iron. Clearly, without money, commerce and production would collapse. There would be no common denominator for value. In their efforts to obtain what they want, people would likely resort to coercion or force. And that’s when the utopia will reveal its darker, dystopian face.

It is no coincidence that even in tightly controlled environments, such as prisons, where resources are distributed centrally and equally, certain goods inevitably take on the role of money. Cigarettes, coffee, and other valuables become mediums of exchange.

People need a common language of value – a tool to acquire what they desire. Money helps us manage scarcity, brings clarity, and allows us to plan and organise our lives. Abolishing it wouldn’t eliminate scarcity, but it would be transformed into something chaotic and unmanageable. If tomorrow we all forgot what money was, by the day after tomorrow, we’d reinvent it. Money is a precondition for freedom. So the next time we hear politicians promising universal basic income, shorter workweeks, or ‘free’ digital money, let’s remember: resources were, are and always will be, limited. Eliminating money won’t eliminate scarcity – it will only expose it in new and far more dangerous forms.

Leonardas Marcinkevičius is an expert at the Lithuanian Free Market Institute.

This blog was originally published by the Lithuanian Free Market Institute in Lithuanian.