David Graeber argues that the inefficiency of barter in archaic society has been used by economists since Adam Smith to explain the emergence of money, the economy, and hence the discipline of economics itself.[2] "Economists of the contemporary orthodoxy... propose an evolutionary development of economies which places barter, as a 'natural' human characteristic, at the most primitive stage, to be superseded by monetary exchange as soon as people become aware of the latter's greater efficiency."[3] However, extensive investigation by anthropologists like Graeber has since then established that "No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing. But there are economies today which are nevertheless dominated by barter."[4]
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An alternate currency, denominated in labour time, would prevent profit taking by middlemen; all goods exchanged would be priced only in terms of the amount of labour that went into them as expressed in the maxim 'Cost the limit of price'. It became the basis of exchanges in London, and in America, where the idea was implemented at the New Harmony communal settlement by Josiah Warren in 1826, and in his Cincinnati 'Time store' in 1827. Warren ideas were adopted by other Owenites and currency reformers, even though the labour exchanges were relatively short lived.[20]
In Canada, barter continues to thrive. The largest b2b barter exchange is Tradebank, founded in 1987. P2P bartering has seen a renaissance in major Canadian cities through Bunz - built as a network of Facebook groups that went on to become a stand-alone bartering based app in January 2016. Within the first year, Bunz accumulated over 75,000 users[29] in over 200 cities worldwide.
Make the deal. After you've found a barter partner, get the agreement in writing. Make sure you detail what services or goods will be involved, the date of the exchange (or work to be done) and any recourse if either party reneges on their part of the deal. If you are working through a membership-based bartering association, they will likely provide all the structure and paperwork you need for the deal.
Bartering may sound like a style of commerce more fitting to a backwater marketplace than a modern capitalist environment. According to the International Reciprocal Trade Association—an organization created to promote “just and equitable standards” in modern bartering—the U.S. barter market is a staggering $12 billion annually. In other words, $12 billion worth of goods and services are traded every year without any currency changing hands. Scott Whitmer, founder of trade exchange company Florida Barter, says that while 2011 saw positive signs of an economic recovery, many small and medium-size companies are still struggling. “Bartering has continued to help many [of these] companies grow and conserve cash,” he says. Though Florida Barter enjoyed a record 2011—a 12 percent increase in total trade volume; more than $17 million worth of trades among the 1,600 clients—Whitmer says bartering as a business practice is still in its infancy, “on the cusp of exploding.”
Barter Network Ltd. is a proud member of The International Reciprocal Trade Association, IRTA, which is a non-profit organization committed to promoting just and equitable standards of practice and operation within the Modern Trade and Barter and other Alternative Capital Systems Industry, by raising the awareness and value of these processes to the entire Global Community. IRTA provide all Industry Members with an ethnically based global organization, dedicated to the advancement of Modern Trade and Barter and other Alternative Capital Systems, through the use of education, self-regulation, high standards and government relations. The Board of IRTA consists of Key Players in the Barter Industry, With Patti Falus President of Barter Network Ltd. being the only Canadian who sits on the Board.
In Spain (particularly the Catalonia region) there is a growing number of exchange markets.[24] These barter markets or swap meets work without money. Participants bring things they do not need and exchange them for the unwanted goods of another participant. Swapping among three parties often helps satisfy tastes when trying to get around the rule that money is not allowed.[25]
Other countries though do not have the reporting requirement that the U.S. does concerning proceeds from barter transactions, but taxation is handled the same way as a cash transaction. If one barters for a profit, one pays the appropriate tax; if one generates a loss in the transaction, they have a loss. Bartering for business is also taxed accordingly as business income or business expense. Many barter exchanges require that one register as a business.
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