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I'm interested in your third paragraph, particularly "Money demand comes from things like tax codes, debt/bankruptcy laws, torts, ...civil fines, etc."

In prison, packs of cigarettes are money and none of the things you mentioned exist. Yet in a prison I can trade a pack of smokes for a tattoo, drugs, cellphones, etc. It seems like money arises out of the need to have a reliable, constant value for exchanging good and services.

Do you differentiate between money and currency(medium of exchange)?

Prison has a lot of structure, in the form of laws,customs,and constraints imposed from without and from within. The role of money in expressing the power of the state may be distinguishable from its role as a medium of trade, but I think if anything the prison example contradicts the point you seemed to be making.

Fair point, I meant it in that prison officials don't issue the currency and in fact they actively discourage trade among prisoners. betterunix makes it seems like the state and money are essential for each others existence.

I'm not sure if there is a difference between currency and money, but there is a difference between fiat and non-fiat currencies. Cigarettes are not a fiat currency; they have inherent demand because they can be smoked.

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