Bartering is back
There’s some evidence that bartering is making a comeback. Of course, with bartering rather than using money to buy something, there’s a direct exchange of products or services between people without any money changing hands. N.C. State University economist Mike Walden considers whether the rise of bartering is a response to our economic conditions.
“We see this happen — this being the rise in bartering — every time we have a recession. And obviously one of the factors of a recession is (when) people have lost their job or had their hours cut back, they’re short on money. So they don’t have money to buy things. And so bartering becomes an option.
“And, of course, with bartering, for example, if I need my house painted or we need our house painted and we’re not good painters but maybe we have a vegetable garden, we’re raising vegetables, maybe we can find a neighbor who will paint our house in exchange for vegetables. That’s the way bartering works.
“So we typically do see it rise up when we have the economy going down. But I will guarantee you, when the economy bounces back, bartering will wane. And the simple reason is bartering is a costly way to make trades. It’s costly in terms of time. For example, if we, going back to our house painting, if we need our house painted and we know a good painter, we just call the painter up and, say, book a date. He comes. We pay him.
“If we’re trying to find a neighbor to paint our house, we’ve got to find a neighbor who can paint and paint well. And that will take time. So, that’s one reason why bartering disappeared is because using money exchanges was a lot more efficient in terms of our time use. Therefore, I think when the economy comes back; we’ll see bartering go down.”Category: Economic Perspective