In an amusing example of attempting to barter for a tax bill, a UK reporter phoned up the local tax office, the council, and offered ties, baked goods, or work in exchange for a clean tax bill. The council employee turned him down, with a response that his proposal was novel but not worth exploring. Cash is dead, they say. Financing is frozen, they say. Banks aren’t lending, they say. Yet governments only accept cash. So, in the eyes of the government, cash is king. The king is dead, long live the king.
Barter is the new king. Deposing the old cash king took a world wide economic near-collapse. I say near-collapse because anarchy hasn’t yet occurred. In the wake of scandal and difficulty, we as a world people are remembering our forgotten roots. Hundreds of years ago, in the civilized world, we bartered. As a matter of fact, we bartered. There were no hard currencies available in large quantities. If anything, we traded bank notes, assuming we could get our share of whatever was guaranteed by the bank, whether it be metal or other mineral. Now, we assume we can get what we want by giving up what we have…a classic barter.
In reality, though, barter has been alive and strong since the beginning of civilization, even in the last century of national currencies and digital economies.
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.
Large trades occur on a daily basis. And like our friend from the UK points out, many businesses use barter as a way to avoid problems related to currency value.
Ormita, one of the new attempts at an international barter currency, aims to take that value of a currency and translate it across borders. I have to admit, I had the same dream ten years ago. Imagine a world in which the value of your currency could translate and transcend international boundaries.
Even if your dream is smaller or just focused on your community, a local barter exchange adds much needed availability to business, in times of plenty or scarsity. So, cash is dead…long live the new king: barter.