Scientists conducted experiments which showed how spontaneous co-operation ebbs away as societies get larger.
Money overcomes this tendency by encouraging anonymous strangers to trust each other.
Without it, large industrialised societies may never have evolved, the research suggests. Historically, humans have only survived by binding together in close-knit groups - yet modern society depends on the co-operation of complete strangers.
The US study involved 448 volunteers playing a "helping game" designed to examine the impact of money.
In one of a series of experiments, participants could choose whether or not to offer "help" to fellow players in the form of gifts of "consumption units" (CUs).
Later the CUs were swapped for real money, providing an incentive to acquire more of them.
Being generous increased the chances of receiving reciprocal help and units in the future. But this voluntary "give and take" system only worked when groups were small and individuals dealt personally with each other.
The introduction of worthless tokens brought about a dramatic change. Volunteers instinctively started using the tokens as "money" - rewarding help with a token or demanding one in exchange for help.
With tokens included in the game, the average rate of co-operation remained a constant 52.1% even when groups increased in size, the scientists reported in the journal Proceedings of the National Academy of Sciences.
The team, led by Professor Gabriele Camera, from the Economic Science Institute at Chapman University in Orange, California, wrote: "This study has identified a behavioural reason for the existence of money..
"Our research suggests that norms of voluntary co-operation are difficult to use in a society of strangers, unless they are mediated by some institution.
"In the experiment, monetary exchange, one of the most basic economic institutions, emerged endogenously and supported a stable level of co-operation in small as well as large groups.
"Inherently worthless tokens acted as a catalyst for co-operation, acquiring value because of a self-sustaining belief that they could be exchanged for future co-operation."
But the study also exposed the dark side of money, showing how it led to a social cost. Voluntary helpfulness was replaced by mercenary values.
"Once the convention of money took hold, participants replaced norms of voluntary co-operation with a norm of exchange, i.e. trading co-operation for a token, quid pro quo," said the researchers.
"This damaged co-operation whenever monetary trade was unavailable."