Advantages and Disadvantages of Bartering

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dejure

Advantages and Disadvantages of Bartering

Post by dejure »

Some cities are now issuing script in an attempt to promote spending within the city. Unfortunately, history is replete with instances of issued script becoming worthless. One of the problems is that when trust drops in the script, where do you go to redeem it? Other individuals are not obligated to take your loss from you.

One obvious advantage of bartering is, except in the case of services to be rendered, it deals with tangible things. From that, a second advantage forms - the transaction usually takes place at the same time an agreement is reached, so any potential loss is limited to product quality.

In the case of services, or even tangibles, script may still be used to represent the value. However, this has the problem of creating a situation where the two parties to the transaction determine a value of script and all others using the script must accept it to maintain the trust in the script. Alternatively, the parties could create I.O.U.'s that detail the facts of the transaction. Perhaps like money, a standard form would be used. It could include, for example:

A heading clearly showing the purpose of the document
The date of the transaction
The product(s), or service(s) offered for the exchange and which/that may be redeemed upon presentation of the I.O.U.
The printed and signed names of the parties to the transaction
In some instances, a date certain by which the I.O.U. must be redeemed

The same thing could be accomplished by ledger entries, but these may not be as convenient, since toting a ledger is more difficult and would be the equivalent of carrying most or all your negotiable assets with you, or at least all the ones in the ledger.
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Watchman
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Re: Advantages and Disadvantages of Bartering

Post by Watchman »

I'm assuming we're thinking in terms of a breakdown of society and not the need to keep track of transaction value for the worthless federals? F.A.G.S = Food, Ammunition, Gold, Silver :twisted:
“Two is one, one is none”
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dejure

Re: Advantages and Disadvantages of Bartering

Post by dejure »

I was only thinking of a total breakdown in part. Years ago, I joined a barter company (actually, my business did) to which large corporations like Pan Am, Goodyear and so forth belonged. I traded some of my artwork to someone and ended up with barter bucks, by whatever name they were then called. I then used them for a new set of Goodyear tires. Too, I and the wife had one heck of an weekend retreat at a very expensive resort. It have cost nearly a five hundred dollars (keep in mind, that was over twenty years ago). Of course the Infernal Revenuers came down on that pretty hard in the end. I wasn't hurt by the shutdown, but I suspect others were.

Anyway, if one wanted to avoiding toting tradable goods, there would only be a couple choices. One being to make deals then return to execute the deal. The second would be to enter written agreements, be it an I.O.U. or a bill representing value. That gets complicated for this simple mind though, since the bill would come into being representing value, like the pig and one hundred board feet of pine being traded. But once the trade was made, both parties have the paper and to use it must be willing to part with the pig or the pine (all or in part). And if I eat the pig, the value of the paper is gone. Using it is going to get me in hot water. So what then? Back to gold and silver?

As the bartering becomes more complicated, a form of tracking it, or a means of avoiding packing around a pig or sling load of lumber would become more desirable. In my ignorance, I would be inclined to trust your I.O.U. even more than script. It's difficult for this feeble mind to wrap itself around such things. Those who have offered things such as Liberty Dollars are always vulnerable, if not to their own greed, the greed of others.

Anyway, the paper, in whatever form, could be representative of more than gold, silver, food and ammunition, but yes, it, certainly, would not represent debt instruments like the FRN's. It could, for the most part, represent life as usual. Well, somewhat. If so, it could be exchanged for a nights shelter and food. It could be a new smoke house (e.g., labor, materials, or both). It could be paperwork preparation (e.g., blank I.O.U.'s, major agreements) and so forth.

A problem with I.O.U.'s, or promissory notes, would be, once outside my barter area, no one would know me, nor I them, and neither would have a way of being assured the paper alleged to represent value traded was not a clever forgery. Then we're back to carrying the pig, or setting up deals and carrying through later.

Maybe a central point (the local ma and pa store, for example) would have to be established to certify transactions to help maintain the integrity of the processes. Such would seem to demand registration, of sorts, in each town, where traders willing to exchange I.O.U.'s could record their signatures and such in advance, for comparisons to documents presented. Storing promissory notes with someone else could be risky. We could end up back in the wild west type bank robberies. Complicated, this money thing.

In the end, hard times, or times of collapse would make ripe opportunities for barter. FRN's, if still worth anything (think about how much these trillion dollar bailouts must have deflated our already pathetic debt instruments), might be hard to come by. Still, there will be too many things needed, as people adjust and become accustomed to being more self dependent, as well as less dependent on outside sources of amusement. But we always have the sweat of our brow, or a talent to offer.
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Watchman
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Re: Advantages and Disadvantages of Bartering

Post by Watchman »

It seems to me the only good answer is small denominations of silver and gold coins. I've been acquiring small silver coins - I wouldn't want to have to try to break a large gold coin unless it were for equal worth. Right now people are lulled into a sense of complacency (another word for their security :?: ) by low gasoline prices. Oil, gold, and silver will skyrocket this year - my prediction. It probably wouldn't hurt to deal in the other currency also - ammunition. Ammunition will probably be worth it's weight in gold because it is multi-use: defense and acquiring a food supply.
“Two is one, one is none”
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308gun

Re: Advantages and Disadvantages of Bartering

Post by 308gun »

one item never to forget about bartering is LOCATION , LOCATION , Why ? because you do not want to be in any area that keeps you a setting duck, like inside a school fenced area , inside a building ... or a area that is controlled by only one side (strong arm )............ and the second problem is who sets the values . you and the buyer .... no out side force..... :wink:
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knobster

Re: Advantages and Disadvantages of Bartering

Post by knobster »

One big disadvantage of bartering is the different value placed on the items. I would trade my left arm for a bottle of insulin. A non-diabetic would overlook such a vial without a second glance.
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