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shilolo's avatar

What are the advantages and disadvantages of the barter system over the use of money?

Asked by shilolo (17826 points ) October 23rd, 2008

As I was purchasing my bagel this morning (or, more accurately, what bakeries in San Francisco consider a bagel, but I digress), I pondered how this transaction might have gone without money. In my opinion, the strength of the barter system is that it forces everyone to have a skill or something to trade while also creating a chance to shop locally. On the other hand, money allows us to buy high value items (like plane tickets, cars and houses) or to shop for things from a distant locale. What are your thoughts?

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13 Answers

jvgr's avatar

Tax avoidance

Lightlyseared's avatar

Well, if you are a baker you can barter bread for meat with butcher for example. If you are a research doctor specialising in infectious diseases (just picked at random off the top of my head) then you may find it hard to produce antything to barter with. Well anything that a grocery store clerk my want at least.

shilolo's avatar

@Lightly. Hmmm, I’m not so sure about that. See, a doctor could theoretically barter medical care for food, drink, a BMW, you name it…

I drive a 7 year old Honda Civic, FYI

loser's avatar

Well, money is a lot easier to fit in your wallet…

Lightlyseared's avatar

@shilol You could, but you would have to promise to provide it in the future as it is unlikely the baker would be at work if he was sick. That promise would probably be written on a piece of paper with your signature, which the person you gave it to could then barter with other people for other services. So your promise to provide medical care is basically money.

In the UK bank notes feature the legend I promise to pay the bearer on demand the sum of £5 (or what ever the value of the note is) signed by the chairman of the Bank of England.

shilolo's avatar

@Lightly. Very true, but that is the virtue of local “shopping”, right? If I have a relationship with the baker, and he says, OK, I will give you a loaf of bread per week in exchange for medical care, then that would work (though I might want a loaf of bread and some yummy cupcakes in exchange for my services).

Lightlyseared's avatar

@shilolo That set up reminds me of the film Doc Hollywood. I have to be honest living in a big city I sometimes think it would be nice to live somewhere where everyone knows you and everyone helps each other out, barters etc. One draw back of bartering may be that it would be difficult to decide a fair “price” for stuff. For example what is a loaf of bread worth in pork chops, candles or whatever. The other thing is where people owe you a service in the future how do you know that they will repay you and will they repay you at a time that suits you. For example, the local doc owes you because you’ve given him something and you want the service when you have a heart attack in the middle of the night but he only feels like helping you out for a skin rash during office hours (extreme I know, but I hope you get the idea).

basp's avatar

We used to have a deli in the bay area and we bartered for book keeping services and a few other small things.

(by the way, shilolo, house of bagels is the only place in the bay area that comes close to a good bagel)

shilolo's avatar

@Basp. I’m well aware of House of Bagels, trust me, but, it isn’t anywhere near where I live or work, so I’m kind of stuck.

nikipedia's avatar

It would be tough to be in a position of having to learn your skill. Imagine the hypothetical scenario of, say, being in an MD/PhD program and having to be in school for, what, 8 years? You’d have to have a backup skill to barter until you got your doctoring skills…

also if you’re ever in Palo Alto, Izzy’s is unbeatable.

scamp's avatar

Years ago, I had a mobile dog grooming service. I did quite a bit of bartering, and it worked pretty well for me. I traded for the following things:

A dinette set
A dresser
A love seat and matching chair
A parrot
A comforter set for my daughter with matching curtains
A car
A .38 caliber pistol
Accounting services
Hair styling services

And many more things. I’m not so sure I’d feel comfortable bartering for medical services tho. I don’t know how that could be regulated. But if there was a way to be sure the doctor was in good standing, it sure would beat paying such high insurance premiums!!

Lightlyseared's avatar

There is a credit card er… type thing called Bartercard which you fund with goods and services rather than cash.

Knotmyday's avatar

I’m just wondering what one would barter for a bagel- a similarly-priced item? We get free pens at work… Or would you barter for labor or a service? There is legislation to regulate prostitution in SF, so what would be an equivalent sex-service trade for a delicious Philly-smeared bagel? A peck on the cheek?

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