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[[Category:Politics and social sciences]]
 
[[Category:Politics and social sciences]]
 
[[Category:Economics]]
 
[[Category:Economics]]
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{{Copyedited}}{{Paid}}{{Approved}}{{Images OK}}{{Submitted}}
  
'''Barter''' is a type of [[trade]] where [[product (business)|goods]] or [[service]]s are exchanged for a certain amount of other goods or services; no [[money]] is involved in the transaction.  
+
'''Barter''' is a type of [[trade]] where goods or services are directly exchanged for a certain amount of other goods or services; no [[money]] is involved in the transaction. The first instances of trade between individuals were conducted through barter agreements. Money developed later, as a mediating form of exchange. Barter still exists in certain societies, differing from [[tradition]]al [[gift exchange]] as bartering consists of a specific [[economics|economic]] transaction specifying the reciprocal items to be given and has no ceremonial component. A resurgence of bartering occurred with [[technology|technological]] advances, particularly the development of the [[internet]] which permitted [[communication]] on an increasingly [[globalization|globalized]] scale. Direct exchange of goods and services, without need for international [[currency]] exchange has proven attractive to many, and challenges the monetary system to adapt to changing needs of traders who are developing relationships that break down political and national barriers.
 +
{{toc}}
 +
==Definition==
 +
Barter may be defined as the direct exchange of goods or services with which there is no use of commonly accepted [[currency]]. The term “barter” is frequently used as a synonym for "negotiation," in which the two parties engage in a back-and-forth discussion over the [[price]] of an item, but this usage is incorrect. Rather, barter can be used correctly as a synonym for “counter-trade”; however, “counter-trade” most often describes a form of international barter.
 +
{{readout||right|250px|Barter differs from [[gift exchange]] in that in barter the reciprocal exchange is immediate and has agreed upon terms}}
 +
Bartering also differs from the practice of [[gift exchange]], due to the bartering system involving an agreement on what will be "traded" or "bartered" between two [[trade]]rs. In the practice of gift exchange, there are no agreed upon terms on what will be given to the recipient of a gift. What is given as a gift is up to the discretion of the gift giver, and often times involves some level of honor or prestige in what is being presented. Gift exchange may also contribute to greater levels of [[socialization]] amongst the gift exchangers. In the barter system, on the other had, bartering is driven by the basic need for a [[commodity]] or a service, and does not necessarily promote greater levels of socialization between traders.
  
 +
==History==
 +
[[Image:Different cowries.jpg|thumb|right|250px|Cowrie shells were used in trade]]
 +
The beginning of the barter [[trade]] originated at the time human societies began to develop, and continues to exist in some societies today. Modern day [[money]] developed through the trades and exchanges of bartering with the primary exchange being that of "cattle." [[Cattle]], which included everything from [[cow]]s to [[sheep]] to [[camel]]s, was the oldest form of modern day money. This developed into the trade of shells and other items, and continued to evolve all the way to the modern form of paper money in use today.
  
 +
Bartering is traditionally common among people with no access to a cash economy, in societies where no monetary system exists, or in economies suffering from a very unstable [[currency]] (as when very high rates of [[inflation]] hit) or a lack of currency. In these societies, bartering oftentimes has become a necessary means of survival.
  
==Definition==
+
In order to organize production and to distribute goods and services among their populations, many pre-[[capitalism|capitalist]] or pre-market economies relied on [[tradition]], top-down command, or [[community]] [[democracy]] instead of [[market]] exchange organized using barter. Relations of reciprocity and/or redistribution substituted for market exchange. Trade and barter were primarily reserved for trade between communities or countries.
'''Barter''' is a type of [[trade]] where [[product (business)|goods]] or [[service]]s are exchanged for a certain amount of other goods or services; no [[money]] is involved in the transaction. Barter can be bilateral or multilateral as [[trade]]. It is a word frequently used as a synonym for 'negotiate/negotiation', but this usage is incorrect.
+
 
 +
==Problems with Bartering==
  
==History==
+
Although bartering may seem like a simple concept of [[trade]], there are a number of drawbacks to the system. One disadvantage of bartering is that it depends upon a mutual coincidence of wants. Before any transaction can be undertaken, each party must be able to supply something that the other party demands. A related problem lies in the potentially high transaction costs of traders spending time and money in the effort to search for each other. To overcome this, and the mutual coincidence problem, some communities developed a system of intermediaries who can store, trade, and warehouse commodities. However, the intermediaries often suffered from financial risk.
  
 +
As bartering lacks a common unit of exchange and standardization, such as a standardized [[currency]], a commodity that has a high value in one community may not carry the same value in another. Due to this, bartering lacks the efficiency that exists in a currency-valued economy. Currency provides not only a standardization of exchange, but also a store value and a unit of account.
  
 +
The use of the barter system becomes more difficult as the means of production of widely needed goods become specialized. For example, if hyper[[inflation]] took place and [[money]] were to be severely devalued in the [[United States]], most people would have little of value to trade for essentials such as [[food]] (since the farmer can only use so many cars, etc.).
  
The beginning of the barter trade originated at the time of human development and continues to exist in some societies today.    Modern day [[money]] developed through the trades and exchanges of bartering with the primary exchange being that of Cattle.  Cattle, which included everything from cows to sheep to camels, was the oldest form of modern day money.  This developed into the trade of shells and continued to evolve all the way to the form of paper money which is widely used today. 
+
==Contemporary Bartering==
  
'''Barter''' trade is traditionally common among people with no access to a cash economy, in societies where no monetary system exists, or in economies suffering from a very unstable [[currency]] (as when [[hyperinflation]] hits) or a lack of currency.
+
Despite its inherent limitations, the barter system has grown and become useable to [[corporation]]s and individuals in today’s world through the use of barter exchange organizations. These organizations work to match the bartering need of their traders, and provide arenas in which [[trade]]s may take place. Barter exchange organizations remain operational by gathering their income from start-up memberships and renewal fees.  
  
To organize production and to distribute goods and services among their populations, many pre-[[capitalist]] or pre-market economies relied on [[tradition]], top-down [[command]], or community [[democracy]] instead of market exchange organized using barter. Relations of [[reciprocity]] and/or [[redistribution]] substituted for market exchange. Trade and barter were primarily reserved for trade between communities or countries.
+
'''Swapping''' is an increasingly prevalent form of the bartering system, which is more informal in nature than that of formal barter exchange organizations. These informal bartering systems allow people, usually through [[internet]] communities, to trade items of comparable value on a trust basis. Informal swapping generally does not require membership fees and traders are not matched by the site to other potential traders. Rather, they must find their own trading match through listings on the websites. Communities that participate in swapping include sites for swapping [http://www.swapstyle.com fashion], [http://www.eswapnow.com books, videos, games, music], and [http://www.swapitshop.com online trading for kids and teenagers]. Interestingly, though, some of these sites have developed a form of "currency" that can be exchanged for goods on the site, such as "swapits."<ref>[https://www.swapit.co.uk/ Swapits.] Retrieved December 15, 2015.</ref>
  
==Problems with Bartering==
+
While swapping is an excellent way to find and obtain items that are inexpensive, it is reliant upon honesty. On occasion, a person may find that they have sent their part of the swap, but the recipient does not complete the transaction.
  
A disadvantage of using bilateral barter is that it can depend upon a mutual [[coincidence of wants]]. Before any transaction can be undertaken, each party must be able to supply something the other party demands. To overcome this mutual coincidence problem, some communities have developed a system of intermediaries who can store, trade, and warehouse commodities. However, the intermediaries often suffer from financial risk.
+
In [[finance]], the word "barter" is used when two corporations trade with each other using non-money financial assets (such as U.S. Treasury bills). Alternatively, the standard definitions of [[money]] could be seen as being too narrow and needing to be expanded to increase near-money assets.
  
Barter becomes more and more difficult as people become dispossesed of the means of production of widely-needed goods. For example, if money were to be severly devalued in the United States, most people would have little of value to trade for food (since the farmer can only use so many cars, etc.)
+
==The Future of Bartering==
  
==Contemporary Bartering==
+
Bartering future runs along side the development of [[internet]]-based [[technology]] and rapid [[globalization]]. The internet portal has catapulted the once primitive barter system into a global form of [[trade]], which has been increasingly viewed as the “massive barter economy.”
  
In [[finance]], the word "barter" is used when two corporations trade with each other using non-money financial assets (such as U.S. Treasury bills). Alternatively, the standard definitions of [[money]] could be seen as being too narrow and needing to be expanded to increase near-money assets.  
+
Internet based barter sites have allowed not only individuals, but also [[business]]es and organizations, to connect on a global scale, breaking down any previous boundaries that may have prevented trade. This new form of internet or “cyber” bartering is more developed than the traditional bartering system, as it does provide for a commonly accepted unit of account or “trade credit.” Trade credits hold the future to global bartering, as they help to eliminate the necessity for smaller international businesses to produce the otherwise most commonly accepted method of payment for goods and services, [[U.S. dollar]]s. It has been argued by the growing global barter community, that future advances in technology will enable the current system of "[[money]]" to be replaced with an advanced bartering scheme.  
  
 +
Such elimination of money or [[currency]] through bartering may have its advantages. Nevertheless, given the complexities of human society, and the reliance of government on money to provide services to support society as a whole (as well as itself), it appears that barter alone can never suffice.
  
'''Swapping''' is the increasingly prevalent informal bartering system in which persons on [[internet communities]] trade items of comparable value on a trust basis.  Communities that participate in swapping include [http://www.swapstyle.com swapstyle],[http://www.eswapnow.com eswapnow],
+
Human society developed exchange beyond direct barter as it grew in complexity and sophistication. Problems associated with these developments are not the result of the external changes, but due to the self-centered motivations of people. Thus, money itself, or even the love of money, is not the root of all evil, but rather the fact that the internal nature of human beings has contained evil. The solution to this problem, and the establishment of true human societies allowing advances in all areas of life, depends on solving the root cause of human suffering. In the transition era, however, the re-emergence of barter as a means of exchange that breaks down barriers between societies has some merit. The challenge for governments is to develop monetary systems or currencies, such as the [[Euro]], which also transcend national boundaries while continuing support for the social structures that are dependent on the monetary system.
[http://www.swapitshop.com Swapitshop],
 
[http://www.makeupalley.com MakeupAlley], the [http://www.lushforum.co.uk Lush International Forum], the [http://www.bpal.org Black Phoenix Alchemy Lab Forum], and others.
 
  
While swapping is an excellent way to find and obtain items that are inexpensive, it is reliant upon honesty.  On occasion, a person may find that they've been [[swaplifted]]; ie. they've sent their end of their swap, but the recipient does not complete the transaction.  Often recourse is limited to [[shunning]] or [[small claims court]].
+
==Notes==
 +
<references/>
  
 
==References==
 
==References==
 +
*[http://referenceforbusiness.com/encyclopedia/Assem-Braz/Bartering.html Bartering] Retrieved December 15, 2015.
 +
*Barternews.com. [http://www.barternews.com/worldtrade.htm The Original Meaning of Trade Meets the Future in Barter] Retrieved December 15, 2015.
 +
*De Lisser, Eleena, and Rodney Ho. "Barter Exchanges Say Future Looks Promising." ''Wall Street Journal'' (November 12, 1997): B2.
 +
*Hubbard, R. Glenn. ''Money, the Financial System, and the Economy''. Reading, MA: Addison-Wesley, 1995.
 +
*Malitz, Phyliss. "The Business of Barter." ''Journal of Accountancy'' 185:3 (March 1998): 72-74.
 +
* PBS. [http://www.pbs.org/wgbh/nova/moolah/history.html The History of Money] ''NOVA Online''. Retrieved December 15, 2015.
 +
*[http://www.exeter.ac.uk/~RDavies/arian/barter.html Barter - Relevance and Relation to Money] Retrieved December 15, 2015.
  
 
==External links==
 
==External links==
* [http://www.irs.gov/businesses/small/article/0,,id=113437,00.html United States Internal Revenue Service]
+
All links retrieved December 15, 2015.
* [http://news.google.com/news?hl=en&ned=&q=barter&btnG=Search+News Google News - Barter]
+
 
* [http://websearch.entrepreneur.com/cgi-bin/texis/webinator/newsearch/?pr=entrepreneur&query=barter&x=0&y=0 Entrepreneur.com - Article Search - Barter]
+
*[http://www.barternews.com/ BarterNews]
* [http://www.fortune.com/fortune/search?query=barter&publication_id=6&Search.x=0&Search.y=0&Search=Go Fortune.com - Article Search - Barter]
+
*[http://www.bartme.com Barter System]
* [http://www.irta.com/ International Reciprocal Trade Association]
+
*[http://www.barter-software.net/ BCI Barter Software]
* [http://www.nate.org/ National Association of Trade Exchanges]
+
*[http://www.bizx.com/ BizXchange]
* [http://www.bartercenterinternational.com/ Barter Center International]
+
*[http://www.u-exchange.com/barter101.asp How to Barter]
* [http://www.barter-software.net/ BCI Barter Software]
+
*[http://www.irta.com/ International Reciprocal Trade Association]
* [http://www.barternews.com/ BarterNews]
+
*[http://www.itex.com/ ITEX Corporation (OTC BB: ITEX)]  
* [http://www.barter-software.com XO Barter Software]
+
*[http://www.tbex.com/ TBEx The Business Exchange]  
* [http://www.itex.com/ ITEX Corporation (OTC BB: ITEX)]  
+
*[http://www.barter-software.com XO Barter Software]
* [http://www.bizx.com/ BizXchange]
+
*[https://www.creditrepair.com/articles/savings-center/history-of-money History of Money]
* [http://www.atx-barter.com/ ATX The Barter Company]
 
* [http://www.barter-trainer.com/ Barter Trainer]
 
* [http://www.tbex.com/ TBEx The Business Exchange]
 
* [http://www.u-exchange.com/barter101.asp How to Barter]
 
* [http://www.gigafree.com/barter.html Links To Hundreds Of Barter Exchanges]
 
* [http://www.truekalia.com/ TrueKalia]
 
* [http://www.bartme.com Barter System]
 
  
  
  
 
{{Credit2|Barter|50094552|Swapping_(barter)|48679004|}}
 
{{Credit2|Barter|50094552|Swapping_(barter)|48679004|}}

Revision as of 20:09, 29 December 2015


Barter is a type of trade where goods or services are directly exchanged for a certain amount of other goods or services; no money is involved in the transaction. The first instances of trade between individuals were conducted through barter agreements. Money developed later, as a mediating form of exchange. Barter still exists in certain societies, differing from traditional gift exchange as bartering consists of a specific economic transaction specifying the reciprocal items to be given and has no ceremonial component. A resurgence of bartering occurred with technological advances, particularly the development of the internet which permitted communication on an increasingly globalized scale. Direct exchange of goods and services, without need for international currency exchange has proven attractive to many, and challenges the monetary system to adapt to changing needs of traders who are developing relationships that break down political and national barriers.

Definition

Barter may be defined as the direct exchange of goods or services with which there is no use of commonly accepted currency. The term “barter” is frequently used as a synonym for "negotiation," in which the two parties engage in a back-and-forth discussion over the price of an item, but this usage is incorrect. Rather, barter can be used correctly as a synonym for “counter-trade”; however, “counter-trade” most often describes a form of international barter.

Did you know?
Barter differs from gift exchange in that in barter the reciprocal exchange is immediate and has agreed upon terms

Bartering also differs from the practice of gift exchange, due to the bartering system involving an agreement on what will be "traded" or "bartered" between two traders. In the practice of gift exchange, there are no agreed upon terms on what will be given to the recipient of a gift. What is given as a gift is up to the discretion of the gift giver, and often times involves some level of honor or prestige in what is being presented. Gift exchange may also contribute to greater levels of socialization amongst the gift exchangers. In the barter system, on the other had, bartering is driven by the basic need for a commodity or a service, and does not necessarily promote greater levels of socialization between traders.

History

Cowrie shells were used in trade

The beginning of the barter trade originated at the time human societies began to develop, and continues to exist in some societies today. Modern day money developed through the trades and exchanges of bartering with the primary exchange being that of "cattle." Cattle, which included everything from cows to sheep to camels, was the oldest form of modern day money. This developed into the trade of shells and other items, and continued to evolve all the way to the modern form of paper money in use today.

Bartering is traditionally common among people with no access to a cash economy, in societies where no monetary system exists, or in economies suffering from a very unstable currency (as when very high rates of inflation hit) or a lack of currency. In these societies, bartering oftentimes has become a necessary means of survival.

In order to organize production and to distribute goods and services among their populations, many pre-capitalist or pre-market economies relied on tradition, top-down command, or community democracy instead of market exchange organized using barter. Relations of reciprocity and/or redistribution substituted for market exchange. Trade and barter were primarily reserved for trade between communities or countries.

Problems with Bartering

Although bartering may seem like a simple concept of trade, there are a number of drawbacks to the system. One disadvantage of bartering is that it depends upon a mutual coincidence of wants. Before any transaction can be undertaken, each party must be able to supply something that the other party demands. A related problem lies in the potentially high transaction costs of traders spending time and money in the effort to search for each other. To overcome this, and the mutual coincidence problem, some communities developed a system of intermediaries who can store, trade, and warehouse commodities. However, the intermediaries often suffered from financial risk.

As bartering lacks a common unit of exchange and standardization, such as a standardized currency, a commodity that has a high value in one community may not carry the same value in another. Due to this, bartering lacks the efficiency that exists in a currency-valued economy. Currency provides not only a standardization of exchange, but also a store value and a unit of account.

The use of the barter system becomes more difficult as the means of production of widely needed goods become specialized. For example, if hyperinflation took place and money were to be severely devalued in the United States, most people would have little of value to trade for essentials such as food (since the farmer can only use so many cars, etc.).

Contemporary Bartering

Despite its inherent limitations, the barter system has grown and become useable to corporations and individuals in today’s world through the use of barter exchange organizations. These organizations work to match the bartering need of their traders, and provide arenas in which trades may take place. Barter exchange organizations remain operational by gathering their income from start-up memberships and renewal fees.

Swapping is an increasingly prevalent form of the bartering system, which is more informal in nature than that of formal barter exchange organizations. These informal bartering systems allow people, usually through internet communities, to trade items of comparable value on a trust basis. Informal swapping generally does not require membership fees and traders are not matched by the site to other potential traders. Rather, they must find their own trading match through listings on the websites. Communities that participate in swapping include sites for swapping fashion, books, videos, games, music, and online trading for kids and teenagers. Interestingly, though, some of these sites have developed a form of "currency" that can be exchanged for goods on the site, such as "swapits."[1]

While swapping is an excellent way to find and obtain items that are inexpensive, it is reliant upon honesty. On occasion, a person may find that they have sent their part of the swap, but the recipient does not complete the transaction.

In finance, the word "barter" is used when two corporations trade with each other using non-money financial assets (such as U.S. Treasury bills). Alternatively, the standard definitions of money could be seen as being too narrow and needing to be expanded to increase near-money assets.

The Future of Bartering

Bartering future runs along side the development of internet-based technology and rapid globalization. The internet portal has catapulted the once primitive barter system into a global form of trade, which has been increasingly viewed as the “massive barter economy.”

Internet based barter sites have allowed not only individuals, but also businesses and organizations, to connect on a global scale, breaking down any previous boundaries that may have prevented trade. This new form of internet or “cyber” bartering is more developed than the traditional bartering system, as it does provide for a commonly accepted unit of account or “trade credit.” Trade credits hold the future to global bartering, as they help to eliminate the necessity for smaller international businesses to produce the otherwise most commonly accepted method of payment for goods and services, U.S. dollars. It has been argued by the growing global barter community, that future advances in technology will enable the current system of "money" to be replaced with an advanced bartering scheme.

Such elimination of money or currency through bartering may have its advantages. Nevertheless, given the complexities of human society, and the reliance of government on money to provide services to support society as a whole (as well as itself), it appears that barter alone can never suffice.

Human society developed exchange beyond direct barter as it grew in complexity and sophistication. Problems associated with these developments are not the result of the external changes, but due to the self-centered motivations of people. Thus, money itself, or even the love of money, is not the root of all evil, but rather the fact that the internal nature of human beings has contained evil. The solution to this problem, and the establishment of true human societies allowing advances in all areas of life, depends on solving the root cause of human suffering. In the transition era, however, the re-emergence of barter as a means of exchange that breaks down barriers between societies has some merit. The challenge for governments is to develop monetary systems or currencies, such as the Euro, which also transcend national boundaries while continuing support for the social structures that are dependent on the monetary system.

Notes

  1. Swapits. Retrieved December 15, 2015.

References
ISBN links support NWE through referral fees

External links

All links retrieved December 15, 2015.


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