Author Topic: Bartering (& Lessons Learned from Argentina)  (Read 4900 times)

Offline Frugal Upstate

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Bartering (& Lessons Learned from Argentina)
« on: July 17, 2015, 08:13:40 AM »
Just came across this interesting article written about bartering networks post-economic collapse in Argentina written as a lesson learned for Greeks to use in setting up their own barter economy to function in their current collapse:

Barter Networks-Lessons from Argentina for Greece

It's pretty short and worth the read.  Big takeaway--it was functioning well until the government cracked down and arrested a few folks, then the coupons hyper-inflated and it collapsed.

The author suggests getting government sanction as a way to set things up without the threat of the government killing it.  Taking that lesson and applying it to America (specifically in a slow grinding collapse as opposed to a quick catastrophic one where the govt was completely not functioning and therefore not an issue) , I think we'd actually fare better in a way because the IRS already has tax law in place for barter networks.  In theory if you adhered to that then they wouldn't have a reason to shut you down. 

Of course you'd still need actual currency to pay the taxes, on the other hand the participating parties get to decide the "fair market value" and therefore effect the amount of tax to be paid.

Personally I've done a bit of social media consulting / Facebook management on a barter basis and am looking to expand that a bit.  I've got challenges on reporting and on record keeping. 

Has anyone bartered more extensively?  Participated in an exchange?  Kept records?  Paid taxes?  Have ideas? 

Just curious as it seems bartering is always the fall back when money gets tight, so in any kind of long term scenario it will eventually come into play.

Offline mountainmoma

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #1 on: July 17, 2015, 11:08:11 AM »
I have participated in time exchanges. The one very local is a time share, you start out with credit for a couple of hours, and it has a web presence to see what people offer in skills and what current needs are listed. It was hard for me to use as most participants are in the city here and I am 1/2 hour away, and since most people doing this are environmental/transition town, etc.... having to use a car and drive 1/2 hour is a harder sell. So, in this I taught a couple how to make cheese, I repaired someones backpack, I went to a lades house in the small town (10 minutes and on my way somewhere) and did a permaculture-garden-energy/insulation consultation, which she was very happy with. I received yard work/weed pulling from 2 people, and received a hot water heater timer install. The lady running this exchange decided to charge hours/money for time for a few people to run it and I couldnt get enough trades to justify continuing. She was kind of controlling in other ways ( for example, my profile picture wasnt enough of a close-up in her mind, Everyone could identify me tho...) so, I left that exchange. Also, she did not allow any exchange of goods for hours, many exchanges do, maybe there are different interpretations of gov. IRS rules and if they could impact the actual exchange (the non-profit) . I think she went to getting paid a bit too soon, before it was large enough and before many of us were able to plug and and see benefit to pay. Alot of initial set up, data input, program set up was done by people in exchange for hours credit, which was fine.

There is a large Bay Area exchange, seems to not need this kind of money input from members to function, and has alot of promise. It is mostly used in the VERY urban core high population area, not close to here. At first they had some problems of people noticing location, which is a search criteria, so I would get someone telling me they wanted eggs or milk and not seeing I was 1 1/2 hrs away, and these ones likely dont even own a car. This may be worked out, so I should look into it again and maybe encourage some locals here to try this exchange for our needs.

There was another thing tried, very short lived, which didnt surprise me, I saw what it realy was, others thought I was being negative. Basically, the instigators were trying to say it was the beginnings of a local currency, but the way to get any bucks was as a bonus or rebate for shopping at local retail establishments. So, while you could of course theoretically use these as a medium of exchange elsewhere, it realy isnt going to happen. Not enough of them, have to spend too much money to get a few, so they are like a rebate from participating shops/services that can be taken by anyone who agrees to take them -- this is NOT how a real alternate currrency starts, more like a promotional thing for stores. Which is what I said at the time, and it is of course dead now.

I have never kept records etc... as straight time exchanges do not count as barter. ANy actual barter I have done has been pretty sporadic/ random event of low value

Offline r_w

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #2 on: July 19, 2015, 05:42:57 AM »
The reason black or gray markets exist are because the government unduly burdens the market.

Moonshine wasn't big business until prohibition was repealed--it was the revenuer that made it a lucrative business.  Today the same thing happens with cigarettes.

Bartering is work, most people are too lazy or impatient to do it.  Until they realize the .gov cut is 50%, then they start to get motivated. 

Offline OhCanada

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #3 on: August 07, 2015, 08:43:55 AM »
There are small barters and big barters, if I barter for you to build my house without any exchange of money then there is a huge tax loss for the government. If I barter for a bicyle with a knife you want and I get more value than you, there is a much smaller tax loss. People barter in North America everyday, most of us wouldn't even know how to pay tax on it, IE I mow your lawn while you are away for 2 weeks and your daughter babysits a week of her time for me. If I had a lawn mowing business then I'd be expected to pay tax, if you ran a day care center then I'd be expected to pay tax; we would know all of our income, how much we charged per hour, and how much profit etc. But the simple trade of goods and service is nothing new and has been going on since before our respective governments started.

I'd keep your bartering simple when doing small barters, no need to make the simple complex.

Offline Sunshine

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #4 on: August 07, 2015, 11:57:50 AM »
There are small barters and big barters, if I barter for you to build my house without any exchange of money then there is a huge tax loss for the government. If I barter for a bicyle with a knife you want and I get more value than you, there is a much smaller tax loss. People barter in North America everyday, most of us wouldn't even know how to pay tax on it, IE I mow your lawn while you are away for 2 weeks and your daughter babysits a week of her time for me. If I had a lawn mowing business then I'd be expected to pay tax, if you ran a day care center then I'd be expected to pay tax; we would know all of our income, how much we charged per hour, and how much profit etc. But the simple trade of goods and service is nothing new and has been going on since before our respective governments started.

I'd keep your bartering simple when doing small barters, no need to make the simple complex.

I'd agree with this.  We all do small barters, like the services above.  I know two moms where one had an older daughter and younger son; the other an older son and younger daughter.  When the older kids outgrew their clothes, they swapped to get hand-me-downs.  No money, no tax, but pretty common scenario. 

If we had a short-term crisis, I can't imagine anyone expending the energy to prevent transactions like that, or even find out about individual exchanges.  I would hope.

Offline Frugal Upstate

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #5 on: August 08, 2015, 06:17:16 AM »
I agree, that kind of swapping and sharing among friends and acquaintances is fairly common.  It gets stickier when it's a stranger that has something you need, or in a situation where you have excess but don't know how to find someone who has what you need. 

When I trade plant watering and pet sitting with a friend it's just helping out.  When I provided Facebook management with the local butcher shop (which I do) for high quality meat that is actually bartering and because it's being done by my business I report a value on my taxes. 

What I find a more interesting thought exercise is to look at Argentina and Greece (ir SELCO from the Balkan wars) and see what kind of barter springs up or is organized when there is a moderate to large collapse and you have to venture outside your immediate circle to find what you want/need.  Things like how do you find the people to exchange with?  What's valuable, what's not? Are there physical security concerns?

Offline TheRetiredRancher

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #6 on: August 08, 2015, 07:19:47 AM »
Greekman, if you are monitoring this thread, have you seen more bartering going on?  How is it functioning?

Offline DDJ

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #7 on: August 08, 2015, 03:54:45 PM »
Is not the idea of barter by its nature a no profit endeavor.  I have something of value to you and you have something of value to me.  We agree that the items we want are worth the same as what we are bartering for, so there is no value differential.  Using the example my time is more valuable than your daughters so the hour I spend mowing your lawn is with the 2 hours she babysits?  Net $0.00 not profit no income.

I guess that does not work with say a knife i made on my forge traded for the same 2 hours of baby sitting time.  I took scrap value of steel and made something worth 2 hours of your daughters time, but then again I put hours and other resources, coal, into it to make the knife.  Again it is net $0.00 if we agree.

I am sure my logic does not work for the IRS.

Offline TheRetiredRancher

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #8 on: August 08, 2015, 04:42:31 PM »
Is not the idea of barter by it's nature a nonprofit endeavor?  All I can say is you have never worked with true horse traders. Unfortunately a large portion of the human race have to "come out on top" in any endeavor so the old quote of let the buyer beware also means let the trader beware.

Offline spud

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Re: Bartering (& Lessons Learned from Argentina)
« Reply #9 on: November 01, 2015, 04:31:06 AM »
Very cool article about barter and using coupons.  The way I see it is that all faith is lost in the current currency and coupons and such just replace it.  Also, there is a rehashing of your time is worth and is negotiated, bringing a more equitable and fair wage structure.  Too bad silver coins couldn't have been introduced because those are hard to counterfeit.  Also, the government definitely didn't like it cause they had a more difficult time taxing it so they could support their form of oppression.

I haven't done much bartering, currently make plenty of money and don't have financial need to do so but I feel the barter system creates a much healthier community. I at one time, tried to buy seeds and plants in bulk and split them with my friends and such, but there ended up being a lack of interest so I stopped doing it.  Also, in those situations, life was much tougher and needs were more important than wants and society wasn't as superficial and ridiculous as what we currently have now. 

I don't know how much barter brought fairness and thoughtfulness in exchange for good and services.  For example, many people are only willing to pay so much for a item or service even though it worth much more, and they don't care if that business or person gets a fair price or wage.