Trade for your life!!!

There is a subject that comes up from time to time in conversations that my wife and I have on economics, finances, and the like. We will be discussing this or that issue, and sometimes she will say that we should go back to the barter system. It’s one of those pie-in-the-sky deals, like Communism – something that looks great on paper but is based on one or more potentially incorrect assumptions. Whereas Communism assumes that the people running the system will work in the interest of the community at large, the idea of returning to a barter system assumes that people will routinely have the means to obtain anything they want, or at the very least, need.

So the topic is still the barter system. What would that look like? If money disappeared, the people with the most leverage would have silver or gold in hand. Those people probably saved that precious metal for just such an occasion and will start small communities based on people who were already prepared for this. For the rest of us, getting a kickstart in barter means finding a job or skill that you can trade for the means of survival – food, water, shelter, clothing, and possibly both a means of communication and one of transportation. The problem with a world based on barter is that you can probably get these things, but it might be a little tougher to obtain – or even develop in the first place – things like consumer electronics, advanced medical care, or carbon-fiber tennis rackets, because barter may not be robust enough to provide enough incentive to make these things. Working on a system-wide monetary standard ensures that anyone can get what they want as long as they work for a living and spend less than they earn.

But if money did disappear and we went straight to pure barter, i.e. we haggle this-for-that on everything, what would that look like in our modern society? First of all, I would imagine that the responsibility of feeding, clothing, and housing the majority of us would fall to our employers, only I have no idea how Walmart would sell anything on the barter system. Perhaps they would trade with each other; Walmart would trade groceries and goods with another business for their employees in exchange for a variety of bicycle parts and… Well that wouldn’t work, I think.

The problem with barter is that you have to have something the other person wants. It’s like trading cards: you have to match value for value, and in a barter economy that value can be pretty arbitrary; not that value isn’t arbitrary in a capitalist economy – after all, why should I pay forty dollars for a bar of metal to support my air conditioner? That’s highway robbery. But if I wanted to, I could go get it today. That’s what I’m saying.

Still, I’m a scrapper. I think I would do alright in a barter economy. I could work, that’s certainly a service. I could craft. I’m good with my hands, so maybe I would be a woodworker of some sort – a furniture maker or a cabineteer. Yeah, I just made that word up, I thought it was appropriate. Of course, in a barter economy there is probably constant struggle as people ensure they have what they need, and this is why local IRL communities would come back to primary importance, because they enhance both survival and the utility of barter. And since its hard to imagine advanced technology in a barter system, I think it’s entirely possible that life would be simpler and more enjoyable; or maybe we have reached some point of no return where there is a reason to keep advancing beyond financial incentive. I would be interested to see what that scenario looks like.

What about you? How do you feel the barter system would fare? Do you think it would be possible to live in a modern society, or even develop one in the first place, in a bartering economy? Would you be successful in a barter economy? Let us know in the comments.

What do other bloggers have to trade?

Today’s Daily Post prompt
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  1. I have always advised my clients against bartering, though there are always exceptions. It is often very hard to get both parties to agree to the value of the traded things/services. More often than not, I’ve seen one party angry because they felt like they gave more than they received, especially with services. People almost always feel like their time is worth more than the other person’s time.

    • I think in an all-barter economy those feelings might fade after time, but I agree that value can be a tough thing to agree on, especially when mixing goods and services – it’s like an exchange rate has to be agreed upon, and I’m sure everyone just wants a good deal (not necessarily a fair one).

  2. I don’t think all-barter could survive, but I think there’s room for MORE bartering, especially in areas highly condensed with people in things. A barter market with an entrance fee to pay for costs could do as well as a flea market, I’d imagine. 🙂 Who knows, though! 😀

  3. Ive unknowingly lived on The barter system…ive traded personal training, self defense, and tickets to shows for so many of my wants/ needs.
    We could work together and be successful im sure.

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