Friday, January 25, 2013

Barter is Back

First a Rural Economist definition. Barter is the exchange of goods or services for other goods or services in which currency is at most a secondary consideration.

Barter was the first economic activity. Ever since there have been enough people to form bands, clans, or tribes, trade has occurred. Fish traded for furs or berries for arrow points. Currency was not created til much later. The advantage currency did and does have is it makes things easier. If you have something I want but I don't have anything you want, currency enables us to trade where we would not have been able to before without bringing someone else into the transaction. That is where the traders came into being. If you have a pig for trade and I have chickens and eggs to trade, a trader could assist in getting each of us what we want by using a network of people who have and want different things. This process could take quite some time to work through. People traded with a purpose. They knew what they wanted or needed. This process by default made people more frugal. There was not much impulse trading.
 
Barter is an economic activity in which all participants can feel as if they made a profit. If I purchase an item from someone, at most I can feel as if I have gotten a good value but no profit. Barter is also a way of getting things without a need for currency.

After the creation of currency, the popularity of barter began to fade simply because of ease and convenience. Barter slowly retreated to rural areas and certain social groups. The homesteaders for example, never truly gave up on barter. In fact, even if you think you have never traded before, odds are you have. The best example is buying a new car. I remember my dad trading cars. He would normally have to add "boot" money, but the trade would be made. These days people use their car as the down payment. This is still a modified form of barter. (I may talk more about that later.)

The current world economy has brought barter back to life, not only in rural areas,but all over the world. ABC News on January 13th had an article about the rise of swap parties for high fashion items and Newsweek last fall also touted the benefits of the barter economy.

If you do an online search for barter you will find sites for every major area of the country. I myself have started the Alabama Barter Page on Facebook. In less than 5 days we have over 135 likes. This is something we can all do. If you are on Facebook, do a search for a barter page in your state or area. If one exists join or like it. If one doesn't start one and send me a message. You can like Alabama Barter Page and we will like yours. I would love to see a nation wide network of barter pages. There are things that I would be willing to drive for. We can do this.

Being frugal and barter are back. Maybe we can use this to help the whole country to learn how to
Keep It Rural