Other anthropologists have questioned whether barter is typically between "total" strangers, a form of barter known as "silent trade". Silent trade, also called silent barter, dumb barter ("dumb" here used in its old meaning of "mute"), or depot trade, is a method by which traders who cannot speak each other's language can trade without talking. However, Benjamin Orlove has shown that while barter occurs through "silent trade" (between strangers), it also occurs in commercial markets as well. "Because barter is a difficult way of conducting trade, it will occur only where there are strong institutional constraints on the use of money or where the barter symbolically denotes a special social relationship and is used in well-defined conditions. To sum up, multipurpose money in markets is like lubrication for machines - necessary for the most efficient function, but not necessary for the existence of the market itself."[12]

Economic historian Karl Polanyi has argued that where barter is widespread, and cash supplies limited, barter is aided by the use of credit, brokerage, and money as a unit of account (i.e. used to price items). All of these strategies are found in ancient economies including Ptolemaic Egypt. They are also the basis for more recent barter exchange systems.[15]


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]
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.
As Orlove noted, barter may occur in commercial economies, usually during periods of monetary crisis. During such a crisis, currency may be in short supply, or highly devalued through hyperinflation. In such cases, money ceases to be the universal medium of exchange or standard of value. Money may be in such short supply that it becomes an item of barter itself rather than the means of exchange. Barter may also occur when people cannot afford to keep money (as when hyperinflation quickly devalues it).[15]
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.”

Economic historian Karl Polanyi has argued that where barter is widespread, and cash supplies limited, barter is aided by the use of credit, brokerage, and money as a unit of account (i.e. used to price items). All of these strategies are found in ancient economies including Ptolemaic Egypt. They are also the basis for more recent barter exchange systems.[17]


Modern barter and trade has evolved considerably to become an effective method of increasing sales, conserving cash, moving inventory, and making use of excess production capacity for businesses around the world. Businesses in a barter earn trade credits (instead of cash) that are deposited into their account. They then have the ability to purchase goods and services from other members utilizing their trade credits – they are not obligated to purchase from those whom they sold to, and vice versa. The exchange plays an important role because they provide the record-keeping, brokering expertise and monthly statements to each member. Commercial exchanges make money by charging a commission on each transaction either all on the buy side, all on the sell side, or a combination of both. Transaction fees typically run between 8 and 15%.
Identify your resources. What items do you have that you could easily part with? Use a critical eye to go through your home, and consider possessions you may have in storage or that another family member or friend is currently using. If you would prefer to offer services, honestly assess what you could provide for others that they would otherwise pay a professional to do. It could be a skill or a talent or hobby such as photography. 
Inevitably some people may feel like they were taken advantage of. One way to diminish inequities is to engage in dollar-for-dollar trades. For example, if you would like to trade your housecleaning service for someone’s couch, try to break down the goods and services to the dollar amount. If the two of you decide that the value of the couch is worth $200, why don’t you supply a gift certificate for $200 worth of housecleaning services? It’s a wise course and ensures all parties know what they are getting and what they are offering.
However, this isn’t always possible. For instance, you may have a $150 digital music player and want a small refrigerator worth $100. In this case, if both parties are certain of what they want and understand the difference in value, there should be no barterer’s remorse. Alternatively, you can ask for the mini-fridge plus $50 to make the trade – the worst anyone can say is “no.”
Companies may want to barter their products for other products because they do not have the credit or cash to buy those goods. It is an efficient way to trade because the risks of foreign exchange are eliminated. The most common contemporary example of business-to-business barter transactions is an exchange of advertising time or space; it is typical for smaller firms to trade the rights to advertise on each others' business spaces. Bartering also occurs among companies and individuals. For example, an accounting firm can provide an accounting report for an electrician in exchange for having its offices rewired by the electrician.

When exchanging services, it’s important to remember that bartering is considered income. While you may be able to write off expenses you incur during the barter, you must claim the fair market value of the services you provided as income. For example, if you charge $60 an hour as a massage therapist, and you trade a one-hour massage for housecleaning services, you may have to claim the equivalent income. When you trade assets, you may even be responsible for tracking capital gains or losses. If you have any doubts or questions, consult the IRS website.
A barter system is an old method of exchange. Th is system has been used for centuries and long before money was invented. People exchanged services and goods for other services and goods in return. Today, bartering has made a comeback using techniques that are more sophisticated to aid in trading; for instance, the Internet. In ancient times, this system involved people in the same area, however today bartering is global. The value of bartering items can be negotiated with the other party. Bartering doesn't involve money which is one of the advantages. You can buy items by exchanging an item you have but no longer want or need. Generally, trading in this manner is done through Online auctions and swap markets.
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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