Barter

From New World Encyclopedia
Revision as of 00:05, 28 June 2006 by Jennifer Tanabe (talk | contribs) (References)


Barter is a type of trade where goods or services are exchanged for a certain amount of other goods or services; no money is involved in the transaction.


Definition

Barter is a type of trade where goods or services 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.

History

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.

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.

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.

Baterings history stems from the beginning of time.

Problems with Bartering

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.

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.)

Contemporary Bartering

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.


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 swapstyle,eswapnow, Swapitshop, MakeupAlley, the Lush International Forum, the 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.

References
ISBN links support NWE through referral fees

External links


Credits

New World Encyclopedia writers and editors rewrote and completed the Wikipedia article in accordance with New World Encyclopedia standards. This article abides by terms of the Creative Commons CC-by-sa 3.0 License (CC-by-sa), which may be used and disseminated with proper attribution. Credit is due under the terms of this license that can reference both the New World Encyclopedia contributors and the selfless volunteer contributors of the Wikimedia Foundation. To cite this article click here for a list of acceptable citing formats.The history of earlier contributions by wikipedians is accessible to researchers here:

The history of this article since it was imported to New World Encyclopedia:

Note: Some restrictions may apply to use of individual images which are separately licensed.