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It's hard to pick up a paper these days without reading a story about somebody exchanging one service, skill or good for another. Need your bathroom tiled? Or a leaky faucet fixed? Even Japanese lessons? Try swapping out some of your firewood or fresh veggies. With the economy tanking and credit tight, bartering is on the rise across the United States. Craigslist, for instance, has reported bartering activity doubling on its site over the past year.
Some foresee a revolution underfoot in the way Americans obtain goods and services that is fueled by the internet and economic exigencies. Randy White, founder of the recently launched Bright Neighbor, a site which allows people to trade skills and possessions, believes communities must find new ways to tap local resources and encourage sustainability. Other people advocate for the creation of alternative currencies to supplement the dollar, a practice that was used during the Depression and exists on a small scale in a few places today.
And it's not just direct bartering that's making a comeback. Business barter networks such as BizXChange in Seattle have reported a spike in trade volume, and the company, which also has offices in the Bay Area and Dubai, says it has plans to expand into the Portland market in the coming months. David Wallach, president of the International Reciprocal Trade Association, which represents about 100 such networks including BizXchange, predicts growth of 15 percent in the coming year — and that's on top of a similar jump last year. Wallach calls such networks, which allow businesses to trade excess capacity for much-needed services or goods, the "ultimate business ecologist(s)."
So what does all this mean for the economy and its recovery? Has the recession forced you to accept non-cash forms of payment? Or rethink the very concept of payment? Are you finding new ways to thrive? Has your company used a business barter network for supplies and services? What would you like to trade?
Guests:
- Marcy Strazer: Joseph, Oregon, resident who barters
- Randy White: Founder of Bright Neighbor
- Bob Bagga: Founder and CEO of BizXchange
- Akbar Marvasti: Economist at The University of Southern Mississippi
Photo credit:
Photo credit: Pfala / Flickr / Creative Commons
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While being unemployed for almost 6 months - bartering was a huge help with making ends meet. I also was able to connect with my community on a much deeper and authentic level than ever before. I wish more of us did this. The benefits are great!
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Being a tax consultant, who should be working instead of typing here....It should be noted the IRS has rules about Bartering and reporting the value of the barter as income.
It could be a taxable event
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I think an interesting part of barter is how you negotiate what your service or product is worth. I am a massage therapist so my hour is worth about $70.
Do you trade dollar to dollar? (which I did for lawyers services)
or do you trade for time? (which i do for hair cuts and color)
An oil change and tune up for my car is worth an hour massage.
I've also traded for lawn service, piercings services and jewelry, babysitting/childcare, chiropractor care, restaurant food, bike and car repair. So many things!
Great topic. Thanks!
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Good morning TOL!
I just rode my bicycle home from a North Portland Business Association meeting this morning where Mayor Sam Adams addressed the group. The mayor suggested that facilitating local business barters and service trades are one of the ways that city government plans to assist citizen entrepeneurs through these tough economic times. It sounds like Portland city government is looking to the barter economy as a common sense way to localize our consumer expenditures and investments.
Also, I am curious to know if anyone on the show is familiar with Communty Prosper @ http://www.communityprosper.orgcheers!
Ross
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I'm an artist in Hood River and I have been bartering here for many years. Art is a fantastic commodity for trade and it's great when I am short of cash. Mostly I have ongoing tabs at restaurants in exchange for art, but I have also traded art for massage, phone service, art from other artists, and even used a small piece of art for a tip! The most exciting trade was a trip to London in exchange for doing a painting there. At the moment I need dental service and have the phone numbers of two dentists that are interested in art for their offices.
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“Hypothetically”, this is an effective way of avoiding all kinds of imperial entanglements: taxes; legalities, prohibitions, etc in good times, or bad. It would seem to be possible to participate in this part of the overall economy and retain more value and individual wealth compared to the conventional cash/debit and taxed economy. Not that anyone would deliberately opt-out of shouldering their part of supporting the ever growing governmental overburden; that would be against the law. Still if no cash changes hands or records kept there is no way to tax. Taxes are one thing; one might desire to eliminate the various parasitical monetary institutions that feed off their business, completely, and that is legal.
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When I moved to Oregon, I registered with the Employment Division so I could get assistance hunting for work.
The Employment Division was not pleased that I had neither a car nor a license. [Coming fom, NYC, I had never needed either a car or a license.]
I remedied the situation by bartering my services as a carpenter for driving lessons.
At the time, a woman carpenter was so unusual I was photographed and featured in the local paper.
The newspaper article caught the attention of a zealous clerk at the Employment Division, who called me in for discipline. The service exchange was considered income, and thus compromised my eligibility for unemployment compensation as well as Department Services.
I appealed to her supervisor; and the zealous clerk was overruled.
Barterers should be wary that service exchanges might be considered income by State agencies.
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I am marginally employed. Career gone. I use barter as often as I can. Best example: I gig for several wineries and get paid with wine, I trade this wine to friends that have extra meat from their farm or hunting. I trade my horticultural expertise for handy man tasks I cannot do on my house.
My favorite big example occured in Cornell, NY where they established their own local paper currency that was used among many self-employed, farmer's market etc in barter. I do not know if this still exist.
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Don't forget the good ol' Green Stamps! Just three people can also actually create a "real" currency, as was done during the 1930s with the Pismo Clams (see the Smithsonian website for more into).
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Time as money:
http://groups.google.com/group/time-as-money
Uses time as an ecconomic currency. It emphasize the value of efficiency over specialized knowledge. Pretty interesting stuff.
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In 1993 I ran a materials exchange in Minneapolis called B.A.R.T.E.R (Business Allied to Recycle Through Exchange and Reuse). We worked through MPIRG (Mn Public Interest Research Group) and published a small newsprint catalog - pre-easy internet use/access - letting business know who was getting rid of what/wanting what. An example was pallets. Lots were being landfilled at the time, and we listed business who stockpiled them, and someone looking, another business, could find that info, contact us, and we would help them make the connection. Worked really well. Right up until the State took away our funding (non-profit) and then promptly internallized the operation - most likely for at least twice the expense! Now the internet makes that a lot more feasible, and real-time.
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I get most of my "new" clothes through naked lady parties (an informal gathering of my friends to trade clothes.) We clean out our closets, dump the clothes in a pile at someone's house, and we all dig in and take what we want. Unclaimed clothes go to charity.
I always leave with plenty of clothes, and I feel like I've gotten a new wardrobe!
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My friends and I have always done this. We exchange craft supplies too
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Bartering has been a way of life for me for decades. I'm a craftsman who has traded for medical services, dental care, legal help, house cleaning, car repair , optical care, physical therapy, gardening help,you name it, I've traded for it. I even trade my excess produce from my garden for meals in local restaurants. My husband trades his skills for beer at a local micro brewery. Boy, is he a happy camper.
I don't care for structured barter because of the issue of declared income and taxes.
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I disagree with the statement that bartering isn't efficient. If used as a supplement in the larger economy, it makes us extra efficient by allowing us to get what we need using the skills and infrastructure we already have.
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I own a Video Surveillance and Security company working with different sectors and we have done lots of barters over the past year.
Some examples are:
- Air Conditioning units for my house and our office
- Painting projects
- Landscaping for my house
- We even bartered a camera system for one of our work vans
- Cash registers/POS in exchange for free dinners for a year at a local restaurant
This gives both parties to benefit where they are 'giving their time away', and only costs them the wholesale cost of the materials.
As Mr. Marvasti mentioned, you'll have to know how to make an even trade (how many lettece heads for a car, for example). We can't give away cheap cameras and expect good products in return.
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I grew up with bartering as a way of life; it has been a core value in our family… from “trading” your egg salad for my peanut butter at lunch, to trading toys, to trading clothes between friends & relatives…. We were very poor growing up (no house, just lived in the back of our camper) but my mom was a beautician and would trade a perm or haircut for food, clothes, a place to park the rig, etc… my dad was generally handy and would work odd jobs for stuff, gas money, etc… As I got older I knew how to sew and would use that skill to “barter” for stuff, gas money, even used it to get work-study jobs to pay my way through college. I have a direct sales business now selling baskets, but I often trade other direct sales consultants – my basket for your kitchen gadget, etc. I am now teaching my children the value of “bartering” from the very simple trading cards to your Barbie ballet dress for my Barbie cowboy outfit. I love the barter section on Craigslist and have been very successful in utilizing that, I am excited to try out the other sites listed here today. I’ve never equated my bartering with any sort of monetary value… it’s just what I need for what you need. I do not believe it should be taxed or tracked… it is a way of life (I think Emily mentioned it’s been happening for millennia!)… One of the perks of life!
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Thank you OPB for having me on as a guest today.
Bright Neighbor will be launching our 95-Neighborhood Community Revolution tour April 17th At the CYAN/pdx, 6:30pm. For more details, please see http://www.portland.brightneighbor.com/publicevent?id=148
- Randy White
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Not only is barter a very useful way for cash-strapped folks to get by, but it allows each partner to get more value, since people barter things that they have "extra" of, whether it's things, skills or even business contacts.
In fact, I'm such a believer that I and my gardening partner have started a business that relies upon it. The Sellwood Garden Club is a distributed-network of tiny farms that trades a weekly delivery of a basket of sustainably-grown produce for 30 weeks (akin to a CSA subscription) in trade for use of yards, water and the cost of a water timer -- we supply the rest and sell the extra to restaurants for our "farm-gate income." I like to think of it as hybrid barter.
There are two motivations for this:
1) We believe that good food is the right of all people, not just the well-to-do. Not everyone can afford to put up a bunch of money up front, tough many more "traditional" CSAs now allow payment options now. We have pledged to make some sort of arrangement, be it stuff or work, for anyone who is hungry and asks us for food.
2) By keeping cash-money out of the arrangement w/ our "club-members," I've found that things tend to remain friendlier -- people don't think of barter in the same way as money and are less uptight about "getting their money's worth." This is especially useful when using 20 different soils and exposures.
We've also had some "friends of the club" who have volunteered time or the use of material goods in exchange for a donation of food to the OR Food Bank in their name or a few early season crops 'til they get their own gardens going.
While the internet (Craig's list) helped us get going, word-of-mouth and curious neighbours are all that we've needed to expand our tiny empire across SE Portland. As long as people remain polite and we explain ourselves clearly, we've had no problems.
Though we cannot be taxed for the initial barter arrangement, as a small agricultural business, we pay taxes on our produce sales. Since we're creating wealth and spending money on local ammendments and supplies, I think everyone wins. The club-members certainly do -- averaging a 800-1000% return on their "investment" as compared with organic home delivery of produce, not to mention all the super-cool "green-cred."
-Marie Richie, Sellwood Garden Club
http://drop.io/sellwoodgardenclub
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I've always been a fan of bartering (growing up my parents took us to a few barter fairs and did a fair amount of bartering with their businesses) and it seems in these times it really is the smartest thing to do if you are able. It also makes it possible to keep your standard of living up. Rather than give up little luxuries when your budget is tight (a nice cut and color, some jewelry, lingerie, gourmet food, etc) you can reach out with the help of websites like brightneighbor.com or just simply by word of mouth and create a community in which everyone reaps the benefits.
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Barter or giving stuff away is the next level of human development. When we get tired of the strife and suffering caused by money and materialism, we will choose to cooperate instead of compete. There is abundance in the world if we decide to share. We don't need to consume everything we want.