The Structural Necessity of Prices and Money

This paper argues that prices and money are structurally necessary coordination mechanisms in decentralized exchange systems under fundamental information and time constraints. When agent heterogeneity and informational complexity exceed the capacity for direct communication, decentralized coordination becomes infeasible without severe compression. Prices arise as low-dimensional, rapidly updating signals that enable coordination, while money further reduces dimensionality by linearizing exchange relations and decoupling trade across agents and time. The argument is structural rather than equilibrium-based and does not rely on assumptions of optimality or full rationality.