The Barter Economy has been described as the mother of all economic concepts prevalent today. It is the most primitive and very basic economic theory, which does not consider currency as a medium of exchange.
Bartering is a direct trade of goods and services – I’ll give you a stone axe if you help me kill a mammoth – or something to that effect. Over the years money became a more sophisticated and efficient means of exchange but even in the modern economy, it is clear that bartering still has a big role to play.
In this article I outline 3 modern day examples of a thriving barter economy, these examples illustrate how the barter economy continues to flourish and highlight the potential economic impact of trading without monetary means.
Instagram is quietly becoming a platform for an underground barter economy where posts are swapped for goods and services from high-end brands hoping to attract millennial and cashed-up consumers. According to the New York Times, Mercedes-Benz, Maserati and Dom Pérignon are just three of the luxury brands to strike deals with influential Instagrammers because of the visual marketing clout of the photo sharing platform.
One of the best examples and one I can personally vouche for is Burning Man.
The annual art and music festival summons just a handful of the world’s most weird and wonderful people to Black Rock City in the Northeast of Nevada.
The event has 10 key principles including radical self expression and radical self reliance. Gifting is another of the key principles that make Burning man the wonderful reciprocal experience that it is.
Although the principal states that gifting does not ‘contemplate a return or an exchange’, it is an ideology that promotes reciprocation. Witnessing a city with a population of 70,000 people functioning without a ‘sophisticated’ monetary system is truly astonishing and was my inspiration to write this piece.
As I set out to fulfill my destiny of becoming a successful entrepreneur, one major obstacle always stands in the way and that is finance. It’s a cumbersome weight that blocks the path of many ‘Branson’s in the making’ but one that can be maneuvered through the barter exchange.
I caught up with Shane McCarthy of BlueChief Social in preparation for this article and asked him to share his experiences of the barter economy. Shane is a huge advocate of bartering, both for personal and corporate needs.
These events can be an administrative and financial burden but luckily Shane can rely on a cash-pile of goodwill.
Shane has carried out hundreds of hours of free-consultation over his time as an entrepreneur and when it comes to calling in keynote speakers, Shane can rely on a host of experts whom he has helped at various stages of his entrepreneurial life.
Another cashflow nightmare fro early stage startups are salaries but Shane taps into an acute undergraduate struggle; ‘finding a job with no experience’. Shane loves students and understands their plight and has developed a barter relationship with that in mind. He barters “real-world experience for research and academic expertise” where both parties benefit from the exchange. It highlights the importance of symbiosis in the barter economy is defined as ‘a mutualistic relationship between two parties where both benefit’.
The key to good bartering
Besides symbiosis, I asked Shane to highlight the key aspects to a successful barter relationship:
Likability– Just like we buy from people we like, we’re likely to barter with people we like.
Relationships– The key to developing a good barter environment is the shrewd focus on developing a relationship. If a person does a favour for you, the focus should not be on “immediate reciprocation but on the long-term value of that particular relationship”.
Respect– Having respect for the other party in the barter relationship is key. This feeds into the value that the initiator of the barter likelihood that the exchange will be of value in the future.
Although a prehistoric and often immeasurable means of exchange, it appears that the barter economy still exists in many circles large and small and with research indicating that the barter economy in the U.S is worth a staggering $12 billion annually. One can be sure that should financial markets flutter, Barter could be a very valuable currency indeed.