> Barter is the way.

Umm, could you explain how this would work? Money has typically emerged as a "universal barter," like gold or tobacco (in colonial Virginia for ex.) or cigarettes in prisons that can be exchanged for anything in the assumption that they will always be in demand. So I can trade you gold for your sysadmin work (simply indirect "barter") and you can trade the gold for drinks at night, breakfast cereal, a NYTimes.com subscription, etc. But you can't trade your sysadmin work for any of those because it can't be divided up like that. So whenever you try to have a direct barter system you'll just end up with some kind of money by necessity, maybe gold, silver, seashells, etc. It's merely a higher abstraction on top of the barter, thus "universal barter." And indeed for the NYTimes sub you'll need some kind of e-gold...

Money can be stored to use later but its value is always based on the current amount of money in use and the current amount of goods and potential services/labor. Hoarding it in Smaug's lair under Lonely Mountain is bad not because Smaug is thus in the wealthiest 0.00001% of inhabitants of Middle Earth (meaningless since he doesn't actually use the money) but because by removing the supply of money he has been creating deflation and is thereby depressing economic activity. Decreasing the supply of money means falling prices (because there's less exchange-medium, not because there's more production) means debts are harder to pay back, ppl hoard what's left and the dour mood discourages future economic activity. When Bilbo frees the hoard there will be massive inflation but also a burst of economic activity (i.e., work).
It's true that with only direct barter there would be no problems (or benefits) from increasing or decreasing the money supply, but you'd have much bigger problems. Remember that money is not itself value but merely a means of exchange, one way to measure value,
and storing that money is a way to make a future claim on an amount of future value. Economists are simplifying when they say that money is a "store of value." You're actually just storing a claim on future value. How much value? However much you can get for that amount of money at the moment someone trades you something for it and regardless of the value when you initially stored it.

"Modern" paper money, "reserve notes" used in lieu of the notes' corresponding gold or silver stored for example at a goldsmith, was quickly abused as the reserve keepers learned that they could lend more notes than they had metal, thus creating a kind of virtual store of money (or if money is economic RAM, virtual RAM?), and what might have started as a kind of scam was soon recognized as a great boon because the money supply could expand when there was an opportunity for increased work/production of value and shrink back down if and as the opportunity came to a close. Of course this credit money system a.k.a. Our World has perils and requires constant maintenance and repair but without it we'd be far worse off, more unequal, less healthy, more wretched and to return to your original point, we'd most likely be controlled by more direct and onerous authorities. And with just direct barter we'd be in... the stone age?