Bartering

I'm gathering opinions...Can a 100% bartering business survive and support the business owner without 3rd party involvement in America today? Let's say the business is service based. Let's say the business owner has regular bills like everyone else in the job market...

I think the devil is in the details of what your business needs in the way of other services (the bills you mentioned). It's definitely 90% possible, but it needs to be carefully planned. For example if you need to hire an accountant, you would need to make sure in advance that the accountant would accept trade from you.

Also some business activities (why I say it's not 100% possible) can't be bartered like taxes to the government. So there would need to be some kind of cash economics here to pay taxes.

Also it's a grey area here in linguistics. Sometimes you may trade your services, or goods you received for your services, for cash to pay things like taxes. So how do you define "barter"?

I dont think it could for everyone but it works for me up to a point

Firstly you need something that people want to barter with
I barter my playing music for beer And bar food
I bartered pumpkins for a french speaking course
I am bartering an English course for a swarm of bees
I have swapped jams for cakes And tea at the local café
Money came about because people needed to store trade worth And pay taxes
I have not worked out yet how to pay the french nationalised electric company by barter Yet but if I could afford the solar power I could swap my electricity for their electricity

David

In my experience most people don't know what anything is worth. If it doesn't have a sticker with a monetary value, they are kinda just guessing. This can sometimes work to your advantage but it can also make people reluctant to even try to trade.

Overall, if you stick with it, I think you could do at least half your business this way with little trouble.

I traded my fish tank for 2 leather sofas on Craigs list. That worked out really well. I also traded a dishwasher for a lawn mower. That one didn't go so well. The mower had a busted fuel tank. It held just enough fuel for a test run. Oh well. Win some lose some.


What do other people trade? Let's here your best and worst everyone.

Thanks for the ideas! Good point about value.
I believe "barter is in the eyes of the beholder" and one of the most delightful parts of bartering is that is causes the participants to look, really look at what value an object or service is worth. It brings in a mindfulness that has disappeared from our society where all things can be obtained with a swipe of a debit card.

Chris...the planning you spoke of interests me. I envision having to release my attachment to my plan and rely on serendipitous adventures. Trusting that all we need inevitably shows up when we need it. Not to get religious here. But trusting a process outside of myself can be viewed as a spiritual choice.
Thoughts?

"What do other people trade"...good question . I went to a small local market and purchased bananas. The subplot...the real trade came when I asked the tired quiet clerk how her sewing business was going. This question raised her energy as she told me about creating business cards. Another customer came in behind me and I wished her a good day. My point, there is ALWAYS a barter in play with time and/or words.
The last day I marched out of Walmart vowing never to return again, I traded my sanity for 58¢ saved on the purchase.
Can this continuous exchange be transferred in goods and services? Still thinking...

I believe that the barter system truly does have merit.
It helps us all to establish values on the goods and services that we both provide and receive.
Neither cash, nor 'plastic' give us that deep felt worthiness in transactions.

However, the IRS has a much different view of barter.
If I am a mechanic earning $20/hr, and you are a gardener earning $20/hr, it is easy for us to trade.
I spend an hour tuning up your car, and you spend an hour mowing my yard. Simple.
The IRS looks at it as if I 'made' $20, and you 'made' $20.
They expect each of us to declare that $20 as earnings on our tax forms.

They do not like the barter system, because they feel that some people might not report those 'earnings. Sigh.

In my neck of the woods, battering is becoming more and more important as a survival technique. But I don't know anyone who has a business entirely based upon barter. Bartering seems to happen mostly with small, one-person businesses and private individuals. Bigger businesses, those having employees, seldom barter here.

Have you looked into time banks? We don't have one in my district, but the next district over does. It's an organization that keeps track of the labor time that people donate on projects done under the "umbrella" of the time bank.....if that makes sense. For example, you volunteer to put in 10 hours painting someone's house who had requested it via the time bank. Now you are entitled to 10 hours of labor help from other time bank participants. So say that you need help fixing the landscaping around your house. Five people could volunteer two hours each. It would be a fair swap of labor time from your point of view, while they each bank two hours on their own accounts. A variety of people with specialized skills could be involved with your time bank. Say, accountants, plumbers, auto mechanics, babysitters, gardeners, handymen, computer specialists, tutors, etc. They would trade their services via the time bank. I haven't been involved with a formal time bank yet, but I've thought about getting one established. Right now I just help others out with no obligation, and I'm often paid back with help from them later down the line.

Now, John...of course I would religiously report each an every cent when and if pigs ever fly.

Su , that bank is an interesting idea. I really love the last part of your post best. What if we just trust ourselves- and more importantly , trust others that we instinctively allow in our circle, to act in a kind fashion?

On the Time Bank... last fall a sweet man saw me digging a huglekulture (sp?) bed. I had been at it about fifteen minutes. My friend offered to dig it for me. Fifteen minutes later, I have an 8 x 4 plot that is two feet deep. He said it was nothing.
So, I cooked him homemade soup & bread. It took hours, but for me it felt effortless.

My time projected for digging that plot...6 hours.
His time digging. ..fifteen minutes.
My time making soup & bread...two-three hours.
His time making soup...two days .

The value for me? Priceless.
The value for him? Priceless.

Time, like the act of bartering, seems difficult to measure.

How would the government tax this exchange, provided pigs do fly one day and we each report the entire deal to the IRS?

"He made a hole in the ground that I had to fill up. For that trouble he caused me, I made him get rid of my leftovers for me. We both lost on that exchange. Can I deduct that?"

OH I LOVE THAT!!!

John, that's great! Yup, it's all about perspective.

At the end of the year, my friend can mail an envelope of soup to the IRS and I will send a gallon of dirt. Then I will do my civil duty and turn my friend in to the IRS for not claiming a third of the bread.

Barter has it's pros and cons . I think it would be a very inefficient way to run a business {or society} . All those necessary transactions that would require making a deal other than price or payment terms . Every potential customer would be required to know in advance what you might want or need . Every vendor that supplies your business would have to want what you are offering to pay them with . Everyone would have to know the value of so many things they don't normally deal with . A philosopher once asked " If money is the root of all evil , what is the root of money ?" . I think barter is . Picture that cliche of the country doctor accepting chickens and eggs as payment . He would have to open a grocery store to survive .

Steven, you raise some excellent points. The general list of what we (think we) need may need to be completely recreated and even reduced to its essence.
Food/shelter/clothing.
Cable TV ? Maybe not.
In my thinking, we may be entering a time in history where we will HAVE TO choose wisely .

I wonder if the only items that can be easily bartered are the only items we truly need...
Thoughts?

*Wayne

About the Doctor example...would the doctor need shoes, furniture, dishes..
AKA cobbler, carpenter, potter?

There is also the gift economy. If a lawyer and a plumber each give each other the time/work, is it still taxable? I think below a dollar threshold it isn't taxable here.

Gifts help get through loopholes sometimes. Raw milk is illegal to sell but I have a friend who gives milk away and is willing to accept donations to her farm.

We do some bartering, lots of gifting. I am given a bounty of wonderful useful children's clothing and other items and in return I give away a bounty of children's things. I get lots of gifts and I give lots of gifts, usually not to the same people but our community gains a feeling of generosity.

It would really depend on what kind of business it was, whether it could survive on bartering. If it provides a service that anyone could use and is very transferable maybe.

I'm always looking for ways to take money right out of the picture. Good question.

Semantics. I love it, Matu. Thank you for your post.
My "business" would be comprised of all of the skills and talents that I would choose to offer.And maybe even some I hadn't envisioned. I may gift ( I really do love that word now) someone my time, reading to a vision impaired person. I would not think to list: House keeping
Gardening
Cooking/meal planning
Reading to some who is vision impaired...? Sure
Parrot sitting...okay, I can give that a try.
Digging a huglekulture bed...sorry, pal.
I believe if we each could totally grasp our many talents, we would be amazed. We might help more often and feel free enough to ask more often.
Taking money out of the equation makes the interaction more authentic .
Keep sending the ideas. This feedback is wonderful.

“Consider how seldom it is the case, that a commodity owned by somebody is of less value in use than another commodity owned by someone else! And for the latter just the opposite relation is the case. But how much more seldom does it happen that these two bodies meet!...Even in the relatively simple and so often recurring case, where an economic unit, A, requires a commodity possessed by B, and B requires one possessed by C, while C wants one that is owned by A—even here, under a rule of mere barter, the exchange of the goods in question would as a rule be of necessity left undone.”
— Carl Menger, “On the Origin of Money,” The Economic Journal (June 1892), p. 242.

Hildegard , I am sure the doctor would need shoes , dishes etc. However , What is the likelihood that you would have the pair of size 13 brown and white wing tip oxfords that he prefers at the same time that your child has a fever ?

I like the idea of barter , just not as an exclusive way of doing business . Alternative currencies are in order , I think . The time bank is a great idea . They say time is money , why not make it into currency ? The problem with a time bank may lie in the value we place on our time . If some are washing dishes and mowing lawns do they gain the same time credit as an electrician or physician ?

Semantics can truely route around the bureaucratic mumbo-jumbo . We own a "cow-share" . A share of a jersey cow for which we paid $25 . We now pay the farmer a fee to keep , feed , milk , and bottle the grass fed raw milk we recieve from "our" cow. When we paid the $25 share we recieved 4 gallons of raw milk as a welcoming gift from the other shareholders - $25 dollars being the going price anyway .
A local family here sells raw milk that you bottle yourself and it is labeled "For Use as Pet Food Only " . For a dollar more per gallon than the most expensive brand at the Piggly Wiggly ?
Salatin sells all his chickens as live weight . He will slaughter them for you as a favor .

So this got me thinking about the fact that all the money in your bank account is basically time that you've worked that you've yet to benefit from. If you were to die with 60k in the bank then isn't it somewhat logical to say that you worked more than you needed to? And (if you disliked work)haven't you wasted some portion of your life?

Also money is in some sense just a place holder in time. It's a token that affirms that you've done work and are owed "something". It's really no different than trading work for tin cans. But in the case of perishable items or seasonal things, money is used as a place holder for that item until such time as you need it. Rather than hand written IOU's, we've all agreed to one degree or another that standardized money fits the role.

So I guess the point is Time IS Money. Probably in more ways than we may have thought. In many cases people are bartering their "good years" for a promise of better "golden years". I'm not convinced it's good trade.

Carl Menger has a good point from a 1992 perspective . In 92, I would have agreed wholeheartedly . The statistical argument that says timing is everything .
In 2014, my views have changed. I know my kids fever won't coincide with my holistic healer's need for a new satchel. That's where the idea of time really needs a shift. That shift is the result of trust. She knows my kid needs help. Her authentic purpose on the planet is helping others. She knows this. She does this not because she has to or because her folks made her...she was born to do this. With a raised consciousness , we operate in the world differently . She knows its August and she knows I make awesome Afghans . She trusts that the services given will revisit. I am so thankful for having had the opportunity to get feedback on this topic because I think I found the answer. When the mindset changes, 100% bartering will be possible. The mindset will change not because humans like or want change. Some outer experience will need to happen in order for humans to be willing to shift their perception . Perhaps I am forward thinking, wanting to prepare for a time when /if a resource like electricity is not available either temporarily or permenently and the hospital doors won't open and the nurses have no idea how to take your blood pressure without a gadget... and all your medical information is locked up in some sky drive. What then? I approach my holistichealer who doesn't work with gadgets, and she fixes my kid. I go home and begin spinning wool and the whole system works because it HAS to.

Craig...very true. The "time" money bank is not a good deal since tomorrow is promised to no one.
I do love Jennifer Wadsworth's post on sweat equity and community group efforts. Excellent because all the people are in one area and the projections are short term.
It would be nice if we didn't have to keep tabs and count hours, but we, as humans may not be there just yet. For today, I would love to be part of such a group.

Many years ago, I was told of a case where a butcher made a deal with the family dentist.
Seemed to work well for both parties.
One ate 'high on the hog', while the other had no problem chewing that same hog.

Haha. Very clever, John

Whoa! Senior moment... 1892...not 1992.
I just reread the post, Wayne.

"time is money"

I am not sure there is a set of words in the english language less true, and it's a phrase based on a quote, attributed to one of my favorite founding fathers, Ben Franklin.

We all have 24 hours per day, no more and no less. We do not all have the same amount of days. That we have placed a monetary value on every part of our life is just really , really sad. I spent the day in the woods with my 17 year old son yesterday. I do not recall collecting any fee from him, or him from I.

Was it of no value? We gave each other our time, much more valuable then any price.

We all live on barter, it's just mainly in a monetary form. Many of us trade our souls for money. Doing jobs we can't stand, hoping and saving for a life we will never have. I do believe in bartering trades as much as possible. I also strongly believe in doing things for people that I like, just because I can and they can't. I also believe we should all enjoy now, as much as we can.

No, time is not money, time is much, much more valuable.

I lived overseas where barter systems are common. I have found bartering (or gifting) can be helpful; but, I do not see it as a cash replacement. Most barters are based on a known currency value. I list a lot of my products and unneeded items for sale or trade. I have a cash price and a trade value. I find I get the best response when they are listed as opened to all trades. What I want most right now may not be available for trade; or, that seller may not want what I have. My most recent trade was an example of this. I had an odd new appliance item worth 5x what I paid; the person who wanted it had an odd retailing item that had no market and difficult valuation. I saw a use for the item and decided to get rid of what I did not need and could not return. While this was a win for both of us; it would not work for selling all our farm products. This leaves the option of three way trades; but, the time and effort of those are only worth while on high ticket items. I think being open to barter and trades is good business; relying on only barter is bad business.

No, time is not money, time is much, much more valuable.

What I like to use to make this point understood by most people is a simple question:

"When you are on your death bed, what will you wish...I wish I had spent my money more wisely, or, I wish I had spent my time more wisely?"
Or put a different way:
"I wish I had more money." or "I wish I had more time."

Barter is great where you can, but cash is far more convenient for general trade.

I just bartered 90 bales of hay for a feeder steer -- I'm pretty sure next fall I will appreciate the steer far more than extra hay in my way...

Eric Thompson wrote:Barter is great where you can, but cash is far more convenient for general trade.

I just bartered 90 bales of hay for a feeder steer -- I'm pretty sure next fall I will appreciate the steer far more than extra hay in my way...

Now that, I would call a good trade!

Beef is certainly more valuable then hay here this year.

For two years, because of a major drought, I could not find old hay to use for mulch. Many folks were feeding anything, even wheat straw to their beef.

This year, plenty of rain, and buttloads of old hay. Life is good!

Someone mentioned it earlier, but it is worth emphasising... money is an excellent way of storing value how often will your glut of say, bacon sides from slaughtering pigs coincide nicely with the load of hay that you want to trade for your winter fodder?

And will the hay grower really want to trade that much bacon? They will end up with a glut of bacon in return.

You can end up with some really inefficient trades if there is no common measure of value.

Michael Cox wrote:money is an excellent way of storing value how often will your glut of say, bacon sides from slaughtering pigs coincide nicely with the load of hay that you want to trade for your winter fodder?

And will the hay grower really want to trade that much bacon? They will end up with a glut of bacon in return.

Luckily hay stores well for nearly a year, so I can wait out the bacon barons. If only I could virtualize it another level: distributing hay option certificates, or taking payment through HayPal

I guess I'm not arguing against the concept of barter - I think you just need to be aware of the limitations and inefficiencies inherent in it. Goods don't end up with the individual who can make most use of them, so from the point of view of a seller you get less value from each exchange. There are good reasons why pretty much every culture has some form of currency - be it cowrie shells, chunks of precious metals turned into coins or pieces of paper printed by a bank.

Yes it is probably possible to run an enterprise on a barter basis, I just don't think it advisable.

NB - here is an example of where it might be considered to break down:
I grow staple crops like potatoes. In my community is a skilled builder/bricklayer who does lots of necessary work and is best used in their specific craft, rather than tending crops etc. As a potato grower with all my infrastructure in place the builder has nothing I need. For a barter to take place some of the following need to then take place:

The builder trades me labour for potatoes - I don't need building work so he is not being employed in the best possible role - overall productivity is lost

The builder diverts his time to produce some other product - he is less effective at this - overall productivity is lost

The builder trades his labour with a third party for other goods, which he then trades with me (assuming he now has something I want) - goods end up physically changing hands multiple times (this is WORK and takes time) - overall productivity is lost

The builder does work in the community and his time is logged in a central "time bank" or equivalent which he can trade in for good and services in the community - the processing of this is time consuming and has the potential to be divisive (is one hour of a skill builders time worth more than an unskilled farm hand?) - productivity is lost administering the system but it may be better than other barter alternatives. However this is essentially trading "time tokens" --> aren't they just another name for money?

A cash economy is essentially point 4, just decentralised so that people can carry their tokens and trade them as they see fit in an efficient and unregulated way. Cash in this scenario would add to the overall productivity and wealth of the system by allowing a broader range of productive activities to take place in the community.

Hahahahahaha Haypal! Hahahahahahaha[wipes eyes]
Good one

Seriously though
A blockage to a successful bartering system in our society is education. Skilled and educated professionals start careers buried under a mountain of debt.

The doctor can't take an Afghan as payment, the student loan companies don't take afghans.

Education gives the time of different folks different values. The doctor and the lawyer can trade more easily because they both have high fees. The high school dropout from a disadvantaged background with no skills might need a lawyer but what is he going to do? The lawyer has debt to pay back too. And there is a limit to the number of blankets a doctor needs even if the dropout knows how to knit and can afford yarn.

You may want to use HayPal but I prefer Bacon Bitcoin. ba-dum-bump

Unfortunately, said high school dropout is also likely to not have as many dollar bills as the doctor, or lawyer. More proof they should be avoided as much as possible!

I do not see how anyone could run a business exclusively on barter, but that does not mean that it can not useful. The truth is, our dollars are loosing value as well. Real wages have not went up since about 1968. I know I am still working for less per hour, then I did ten years ago. Money, ain't what it used to be.

A good trade can be hard, but it may be the only time you get real value for your possessions/work. Not only does your dollar buy less then ever, it is also taxed here in the us of a. I understand that anything I barter should be taxed as well, but I still manage to sleep. Relatively well, in fact.

See, I ain't real crazy in playing a game that I didn't get to pick, anymore then I must. That is one reason I grow food, fix stuff, ride a bike as much as I can, buy used and yes barter.

I still need cash, but I ain't quite as addicted to it as some.