Money is dead
Long live barter
Inspired by global economic developments, I’ve been thinking recently about doing without money. Not in a bad way. Oh no: I’m planning to do very well indeed without money – perhaps turn myself into Mr Big. And the method I intend to use, now that money has dried up everywhere, is . . . barter.
I realise it will not be easy. When I started doing this, I phoned the council to ask about settling my tax bill by barter, and an official said: “We allow direct debit, cash, cheque, credit card. But barter? It’s unheard of, sir.”
My accountant had warned me about this: only inheritance tax, he said, could be settled with goods, such as an oil painting. But I persisted, telling the man from the council that if I failed to pay my bill the council would send bailiffs to confiscate goods to the same value – a kind of forced barter after the fact.
What could I offer? A vast sackful of apples and other produce from my allotment, a selection of silk ties (rarely used), large piles of novels (good condition) and some amazing home-baked cakes.
He was unmoved. Perhaps I could work for the council instead – sweep the streets; paint a portrait of the mayor? “It’s a very ingenious proposal,” the official said, “but I don’t want to waste your time.”
I know what you’re thinking: barter is useless. But you may be mistaken. Because an astonishingly large proportion of the global trade in goods and services is barter-based, to protect traders against alarming currency fluctuations.
In one of the most famous examples, Pepsi took profits from Soviet Russia in the form of vodka. The largest barter of all time took place last year: China agreed to build massive infrastructure in the Democratic Republic of Congo in exchange for copper and cobalt supplies worth an estimated £6 billion. About the same time, Saudi Arabia and Iran agreed with Pakistan and Thailand, respectively, to swap oil for food.
Not for nothing has The Wall Street Journal described barter as a “powerful cash-saving tool”. The journal of the “reciprocal trade industry”, Barter News, goes further: “We’re moving into the golden age of barter,” it reported recently, adding that 600,000 companies in the US alone actively traded both locally and across borders.
In the UK, a village pub, the Pigs, at Edgefield, in Norfolk, offered pints in exchange for locally sourced food to be cooked in its kitchens. Thousands of others trade more formally through exchanges such as Bartercard: last year the Fashion TV network used Bartercard to save £110,000 in cash on alcohol and other goods for its launch party – which FTV is repaying by providing advertising.
Happily, barter works for individuals too. A Canadian, Kyle MacDon-ald, made headlines by bartering, via trade after trade on the internet, a paper clip for a house. Only slightly less impressive, my friend the photographer Guy Hills persuaded every tailor in Savile Row to make him an outfit in return for photographing them at work. A couple named Dan and Gemma Scott cut £9,000 from the cost of their wedding by bartering for the church, the reception, the cars and the photos. To do this, they worked as housekeeper and labourer, dug ditches, delivered leaflets and repaired cars. “When Gemma started planning the wedding,” Dan said, “I knew we didn’t have the money for it. We ended up with a £12,000 wedding for just £3,000.”
It wasn’t the Scotts alone who benefited: the people for whom they carried out those services probably wouldn’t have hired them, in the present economic turmoil, if they’d asked for cash. The wedding might not have happened, and a whole lot of economic activity would never have taken place if the Scotts hadn’t thought of using barter.
Despite these examples, it would be misleading to suggest that barter always takes place between two parties who each have something the other wants. Indeed, straight swaps of that kind are rare, because they’re flawed: if you want one of my cakes and can’t offer anything I need, the barter is over before it starts.
To get around this, barter is these days increasingly transacted through a group exchange: you pay me a credit for my delicious cake, and I spend that credit on another member of the exchange – getting my loo unblocked, or having a foot massage. In effect, the credits are a form of money issued and guaranteed by the group.
The challenge lies in finding the right exchange network. ReadIt SwapIt.co.uk has had a huge increase in book swaps (there are currently 221,000 books available). WhatsMineIsYours.com facilitates clothing and accessory exchange. SeedyPeople.co.uk lets gardeners and allotmenteers exchange seeds. UKhomeswap.co.uk has thousands of users who pay a monthly fee in the hope of swapping council properties, while Hamptons International has a similar scheme for landlords.
Alas, satisfaction is not guaranteed. On ReadItSwapIt, for instance, many members have done many swaps – one in Scotland claims to have done 900 – but for me it would be cheaper and more convenient, now that my local post office has closed, to get new books from the library (which hasn’t, yet) and give away anything I don’t need to charity shops.
On swapz.co.uk and swapcycle.co.uk, the variety of offers is stunning. They give evidence that many transactions are taking place that wouldn’t have done if people depended entirely on money. Typical of this is the woman offering to do housework in exchange for somebody fitting tiles in her kitchen, through one of many local exchange trading systems, or Lets, up and running across the country. As many as 40,000 people belong to Lets, and more are joining all the time.
Slightly different are the 250 or so “time banks” across the country, in which everybody’s time has the same value. In effect, this brings members’ income down (or up) to the national average. The revolutionary implication is that if people want to stop being poor and oppressed they could save themselves the trouble of protest marches by setting up a time bank and dropping out of the mainstream economy altogether.
At least, that’s the theory. Practice is trickier. Molly Scott Cato of Cardiff School of Management, the author of Green Economics, a delightful new book examining such things, concedes that time banks can improve quality of life in communities. “But for most members this is peripheral to their main livelihood,” she says.
All the same, I do find all this barter activity rather inspiring. I may not have persuaded the council, yet, but the company that sells me electricity proved willing to consider barter. A woman handling the marketing seemed to think I could help to write some publicity material. Something, however, needed to be resolved first: “How many words do you think you write per unit of electricity?” she asked.