The concept of bartering was formed currency was developed and barter services have gone from strength to strength ever since western economies formed a system of exchanging goods back in the 1830s. Organisations offering barter services are on the increase thanks to the downturn in the economy. Being able to trade goods and services are ideal for cash strapped consumers. The range of organisations offering barter services can be from small enterprises to multinational companies. Equally, the diversity of the goods being offered is huge. According to an article in the national press, some parts of Greece and Spain are so short of cash that barter services are becoming the norm. An unstable currency is another reason that barter services are in demand. The Swiss WIR bank was formed in 1934 as a direct result of the stock market crash of 1929 and formed the first exchange system through the financial markets. The idea of bartering never really went away, but in times of austerity, they are more popular than ever.
Anything can be bartered – from baby clothes to plumbing services to high value advertising and media services carried out by corporate bartering systems. The main problem is finding a comparative value and the parties concerned both requiring the products and services at the same time. Barter services can work on trade credits which can be spent as and when required. There are a number of web sites now offering this service. Users can sign up on line and offer their goods for barter. In the USA there is even an International Reciprocal Trade Association (IRTA) which offers members everything from computers to hotel accommodation to international trade. Estimates from the IRTA are that over 450,000 businesses took part in some kind of barter activities in 2010. Barter services are really taken seriously and you may be able to get some great deals. There is often a charge for joining networks of like minded people, but you will be able to make your own decision as to whether this would be worth your while.
Other downsides of bartering are that some goods are not divisible. A person may want another person’s goods but the goods he has available may be much more valuable that the one he wants to trade for. Some goods may not be suitable for barter. Perishable goods come into this category as there is a difficult in storing them and they have a short shelf life. The economists have come up with many clever ways to offer barter services and get round some of these problems.
The main advantages of barter services are that actual money does not change hands and poor people cannot afford to store their assets in monetary form if there is hyperinflation. Both of these benefits help businesses to continue, even in an economic crisis. Some people think that cash can be taken out of the system altogether and the economy going back to barter services. Perhaps that would be taking things too far!