Notice that the feasibility of satisfying all these conditions simultaneously depends on the technology of wealth transfer summarized byf. If the traders live at great distances from one another and if their principal asset holdings are illiquid (such as land and fixed capital, or reputation and family connections), then wealth transfers may be quite costly (f(J)/J may be large) and the fines required by the LM system then will not work.

XREF: Connects to monetary theory and legal enforcement mechanisms where transaction costs constrain institutional design.

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 118