Barter System Offers Alternative to Cash Economy: Barter Transactions Exchange Skills, Goods & Services and Not Money

Bartering is no longer just swapping a few chickens for credit at the mercantile or a visit to the doctor. As world economies experience their inevitable ups and downs, people have begun to turn away from the notion that “whoever has the most stuff when they die wins." As a result, the notion of having a lot of stuff and needing more and more money to pay for and care for that stuff has begun to fade.

A host of alternatives to purchasing items with cash or credit have begun to appear as people begin the process of divesting their lives of “possessions.” More and more people have begun trading the things that they do have (whether it is a skill, service or some item that they no longer need) for the goods and services that they genuinely need.

What Is the Barter Agreement?

A barter agreement is a verbal or written contract between two people or entities to exchange one (or more) items or services for another item (or items) or service of a mutually agreed upon value. Bartering is also particularly popular among freelancers and free agents who have the flexibility to set the pricing for their services as they see fit.

Who Participates in a Barter Agreement and How Do They Get Started?

In this new “cashless economy” a graphic designer and web site designer might agree to provide a handyman/general contractor with a new business card and web design in exchange for construction of new bathroom cabinets or some painting. One participant in a barter exchange might trade an unused microwave or television set to their landscaper in exchange for free lawn mowing. The possibilities are endless and limited only by a participant’s imagination and determination to keep cash out of the equation.

A number of websites and organizations have begun to offer assistance in helping barter participants find one another. Craigslist, the popular bulletin board service, now has a barter section in many of its community listings. Freecycle.org is a site specifically created to help individuals within a particular community exchange unwanted items for other needed items with the aim of keeping old, outdated “useless” items out of landfills by putting them in the hands of people who can still make use of them.

Additionally, some communities have begun setting up tool libraries in which participants can borrow and exchange tools, and yard maintenance items. Rather than feeling as if they must purchase every tool needed for a task, they can check out the items they need, while also lending items that they possess when they themselves are not using them. For example, one participant in a tool library could borrow a grass seed spreader rather than buying one. In exchange their neighbor might borrow their unused drill press for a day.

Items That Could Be Used As Barter for Needed Goods & Services

Jobs & Services That Could Be Paid For Using Bartered Goods & Services

Barter and Free Exchange Websites

As money becomes tight in a difficult economy, or simply as a new model of doing business, an increasing number of individuals and businesses are turning to bartering and the barter economy as a viable alternative to purchasing goods and services in cash or on credit. While we may never exist in a truly cash or credit free economy, barter agreements offer participants an opportunity to acquire items or services they truly need while divesting themselves of unwanted items, or putting their skills to work rather than relying exclusively on cash or credit.

Apr 3, 2009 9:03 AM

Guest :

Ormita has a website with the history of barter on it which I found interesting - http://www.ormita.com/history-of-barter.html

I saw a timeline that they also published on money and barter but I cannot find it any more. Either way we have considered using them because they seem to know a bit about bartering.

The risks I see with barter exchanges are:
inflation (exchange owners spending barter dollars they dont have)
the wrong mix of members (everyone wanting my product/service but me having nothing to buy)
poor credit control (creating more inflation)

the only reason I liked the Ormita guys was that they let me join and trade but didnt let me sell until I had things to buy. I had ot fill out a buying schedule of everything I currently spent cash on and then they went away and 30 days later they came back with those things and THEN i started buying and selling. The risks seemed lower to me.

I flirted with ITEX and other barter systems but i always ended up selling more than I could ever buy. Like I said - barter can be useful but watch out. I think Ormita don't consider themselves a "barter" system as such - but more an excess capacity exchange or commodity exchange or something. I heard the sales pitch and the difference was a little outside my scope but maybe its just that the trades take place in a relatively short time (both buy and sell) so Im always close to $0 in my account because i spend everything I earn? Anyway if someone has a copy of their "timeline" of barter I'd be interested in getting one. I know I saw it somewhere on the web from Ormita but I cant seem to locate it again. It would be useful to take another look at.