originally on http://projecttz.com/?p=3419 by Phil Palij
Money is a medium of exchange and a store of wealth. It is very easy to fall into the trap of thinking that no trade or commercial activity can take place without money, it simply isn’t so. In this age of economic uncertainty individuals and countries all over the world are once more discovering barter. So what exactly is it and how is it done?
China, India, Iran a Modern Example
- Problem – China owes Iran $30Bn for oil.
- Problem – India owes Iran $5Bn for oil.
- Problem – International oil payments are made in $US
- Problem – International sanctions for the last two years means no $US dollars can be paid over.
- Problem – Trade ceases; OR DOES IT?
Oil is vital to energy hungry developing countries like China and India so the way out of the crises brought on by sanctions is to negotiate an exchange of goods and services of equal value with Iran for past oil deliveries and future ones too, no ‘money’ changes hands. It is an example of a modern barter deal.
Trade without money?
While barter may seem an old fashioned way of trading in a digital world where billions of dollars flow across continents in a nano-second, but as you can see in the example above it still has its place in the economic toolbox of any nation, and of course any individual. It is not complicated and it is a simple truth.
You don’t need money to trade.
We are looking at barter systems for individuals, small business and communities, helping them trade anything, absolutely anything without the need for money. Money still has an important role in, but you don’t need it, what you do need is negotiating skill and faith in your trading partner.
Advantages And Disadvantages
- Trade for skills, goods and services can take place without the need for money
- Encourages new business activity in the present expecting to be ‘paid’ for it at some date in the future.
- Empowers the individual to offer skills, labour and services when he or she has no money.
- The environment benefits because existing products are traded without the need to create new ones, conserving resources.
- Barter can be used as part of a deal letting you hold on to your money
You have to remember that the disadvantages of barter are what caused ‘money’ in commerce to grow in importance, that said, with a little creativity and determination and the advent of the digital age the barriers to its increasing use are coming down.
- You have to find somebody who has what you want and of course they want what you have and at the time you are both looking.
- Once you have found a potential trading partner you need to agree how much of your stuff you are willing to trade for some or all their stuff.
- Barter between friends who know and trust eachother can be done in relative safety. Trading with strangers at the other end of the country who you have never seen before is a risky business.
Some Barter Systems Around The World
With the aid of digital technology and the internet the world of barter can be taken to a very sophisticated level:
Barter may have been a poor relation in recent times but that is changing. A Queensland company set up BarterCard in 1991 with the vision of becoming the worlds largest trade exchange. According to their site in 2005 the International BarterCard franchises had an annual turnover of AUS$1.2Bn.
There are an astonishing number of barter and giveaway sites in the UK: inspired by environmental reasons, the desire to re-cycle stuff, and to avoid simply throwing unwanted things away. As users of the freecycle givaway system will tell you, no matter how unlikely the item you put online, you will probably find at least one person that wants it and probably a horde! It works. Barter is one step beyond and that works too. Here are a few sites to browse.
As you can imagine there are a huge variety of barter sites in the US and here we look at BarterQuest which has been in the news recently. The founders got together over a coffee and financed the website driven business which as yet makes no charge for its services, but will make micro charges in future per barter deal the users of the site make.
You can see their site here www.barterquest.com
What The Press Say
But I Have Nothing To Barter
Oh yes you do, everyone has something to offer. It can be an item that you no longer use, a service or a skill.
If you barter an item you no longer need, you not only remove a little clutter from the house but you save money, help someone else and get something you can really use in return.
If you are an artist or musician, you can barter your talent by offering music or art lessons in return for what you need.
A skill can be something as simple as helping someone’s child learn how to throw that curveball or teaching the neighbour down the street how to use her new digital camera.
You may know of someone going away on holidays and they may need someone to walk the family pet, mow the lawn, tend to the pool, water the plants or anything around the house for that matter.
These are just a few examples but it just goes to show that you’re only limited by your imagination.
Money as a medium of finance and microfinance does not have to limit the use of barter in any deal. In fact it is capable of creating trade where there was no possibility of any before. The interest here is not to look at barterit from the perspective of large national and international institutions, but from the perspective of the labourer, tradesman, subsistence farmer trying to make their way in the world, educate themselves and build a better future.
Barter is a way of thinking and a valuable personal tool giving ordinary people the chance to help themselves. More case studies from the world of barter will appear on this site soon.