By Lara Pickford-Gordon
“Cash will always be king but when used with barter, transaction possibilities expand immensely,” says Stuart Henderson who is spearheading the gospel of trade exchanging or barter to local communities. Stuart Henderson is the editor of The Westerly, a community paper for north-west Trinidad.
We have grown accustomed to using money, whether cash or debit/credit cards to get goods and services. Hard cash or physical money has been in existence for thousands of years.
Before currency, people used to barter to satisfy their needs. “Scientists have tracked exchange and trade through the archaeological record, starting in Upper Paleolithic when groups of hunters traded for the best flint weapons and other tools. First, people bartered, making direct deals between two parties of desirable objects” (www.theconversation.com).
Our reliance today on hard cash means that when we have insufficient or none at all, we cannot obtain the good or service we need. Covid-19 has stymied operations for cash-strapped businesses and reduced consumer spending.
With bartering, people just need to be imaginative and creative. Henderson said this approach can bring opportunities if it is properly organised. “Trade exchanging was used regularly in the advertising world when I was in that industry. A radio station for example would trade 200 radio commercials for a case of rum or whisky. It was called contra advertising.”
The list of goods and services that can be bartered is endless: printing, landscaping, cars, games, power tools, camping equipment, real estate, house sitting, auto repair, tires, school fees, carpet cleaning, accountancy, nights at hotels, babysitting/daycare, computer repair, small home improvement projects, plumbing, medical care, lodging etc.
There was an article online by Arthur V Tebbutt who, in 1970, proposed a barter system for researchers.
Henderson traded an ad in The Westerly for four car tires. “Last year, I also produced fortnightly newsletters for the Moka golf club in exchange for playing once a week. In both cases, activity was accomplished, and parties benefitted without any cash passing. It would not have happened except by bartering. There is the adage ‘Barter is Smarter’.”
According to investopedia.com, bartering has returned through the internet. It also gave the example of Thailand and Iran. Thailand, the world’s largest exporter of rice, exchanged rice for Iran’s oil.
Bartering has been the means by which our neighbours in Venezuela are getting by because of the country’s shortage of cash coupled with inflation. When Pakistan could not pay part of its oil bill to Saudi Arabia, the Saudis asked for food, and access to land for Saudi companies to set up farms.
Bartering has advantages. The Corporate Financial Institute states that individuals can get what they need and get rid of what they own. “It is a reciprocal, mutually-beneficial arrangement that doesn’t involve the exchange of cash or another monetary medium (such as a credit card).”
There are disadvantages, too: “The barter system often creates an unbalanced system of trade, where parties are unable to find others willing to trade…also lacks a common unit of measurement for goods and services. Since most goods depreciate with time, they become less attractive for trade and storing value” (Investopedia.com).
Reciprocity at work
For a bartering system to be developed, Henderson said information is key, and participation by a wide cross-section of people. Explaining how the information will be collected, he said, “This information is economic, and trade-related and is to be sent to an information hub in their area. These hubs can be set up by anyone who is regarded as honest and organised within his/her area.”
Members of the hub submit what they have to sell and what they want to get, in part or in full. Henderson clarified that in some exchanges, money may be paid for shortfalls of the value of the exchange.
“The information hubs can be established in constituencies by political parties, in parishes for churches or any other geographic system by non-governmental organisations, trade unions. It ties in with any group wanting to improve lives.”
Another benefit of localised hubs is that they can help build community as people get to know others in their area.
The information hub can remain operational with a membership fee. Its confidential database will be monitored daily, and members informed of possible exchanges.
Henderson said, “After notifying parties of possible trade exchanges, they leave it to the parties to work out the details of any trade. They do not get further involved unless they want to.”
Bartering requires buy-in from the public. Henderson said a major challenge is for people to take the time and submit in writing what they want to trade and accept as payment.
“The required-want information submitted to the hub in their area must be at least 50 per cent value of what they are selling. For example, one cannot be selling a car for $40,000 and only want $5,000 in home painting. For the entire year, their database ‘wants’ must be at least 50 per cent of what they have to sell, otherwise they will not be notified of possible trades.”
Bartering depends on goodwill and reciprocity. It is not just about getting goods off your hands, both sides must benefit. For further information email: firstname.lastname@example.org
Can bartering gain traction locally?
Henderson provides a few reasons why a new economic platform is essential: