The Barter System - How Americans Can Survive the Economic Crisis

In a speech at George Mason University in Fairfax, Virginia, then President-elect Barack Obama said, "Only government can break the vicious cycles that are crippling our economy." Since then we have watched the government set into play a series of economic train wrecks that have inspired record high unemployment claims ,
a record number of home foreclosures, they've tripled the national debt, and created an all time high of Americans living on Food Stamps . So, what is the average American citizen to do to survive? How can we afford the things we need when we are so short on cash? One clever solution could be the revival of the barter system.

As Americans continue to tighten our financial belts, we find ourselves letting go of those ancillary expenses we can no longer afford. Lawn, housekeeping and daycare services are being dropped in order to pay mortgages, utility bills and to put food on the table. This means the people who performed those services and depended upon that money to pay their bills are out of work. Small businesses are going out of business. Not since the crash of the California Gold Rush of the 1800s have so many Ghost Towns haunted the American landscape. With gas prices expected to hit $5 per gallon by Memorial Day, businesses that rely on the mid-year surge of summer tourist dollars to stay afloat will likely go belly-up by Labor Day. But Americans are a creative sort, resilient and determined. A return to the art of bartering is not only helping many Americans to preserve services they truly need but to stake out a respite of pleasure amidst the many days of struggle.

In Cape Cod, Massachusetts, oysterman Jon Martin bartered crustaceans with a local carpenter in exchange for work done on his house. Although no money changed hands, both men found a way to benefit from the skill of the other to still obtain their needs. "I needed some carpentry done and he likes oysters," Martin said, "so it kind of worked out." You too can put the barter system to use in your own neighborhood.

Let's say you're a mechanic and you need help with your gardens. You have a neighbor who has a green thumb and her car needs work. Maybe you have some home repairs that need attention and you happen to be good at filing tax returns. Maybe your pets need their vaccinations and your Veterinarian is short on staff or can't afford a cleaning service anymore. Brings to mind the lyrics of that Malanie Sofka song, ey?

"I've got a brand new pair of roller skates
You've got a brand new key
I think that we should get together and
Try them on to see..."

Out here in my little community of Spring Hill, Florida, we own six rental units along with our own home on the same street. Unable to afford to pay our lawn service provider in cash and with him struggling to afford to hire help to keep his faltering business afloat, he mows our lawns and I pay him back in the form of the manual labor he needs to maintain his other clients. One of our tenants is unable to afford the $700.00 per month rent. So, being the handy sort she is, for a $200.00 per month reduction in her rent she helps me make minor repairs to the rental units and assists in getting a property cleaned and ready for a new tenant when one moves out.

For me, this is not the first time I relied upon the benefits of the barter system to survive. When I was young and even more strapped for cash than I am now, I lived out in the proverbial sticks in a tiny little spot called Virgilina, Virginia. On my ¼ acre of land I grew just about every vegetable the sun didn't bake and the deer didn't eat first. With my surplus, I traded for eggs, bacon and those gorgeous country hams. During that same time I worked in a hair salon. I needed a babysitter for my young daughter. My sitter needed regular haircuts. Bartering makes many of the things you think you have to give up very much attainable again.

In a report by Dr. David Woodruff of MIT bartering was a very important component of survival after the collapse of the Soviet Union back in the late 1990's. During a financial crisis that lasted a decade, inflation had all but destroyed the Russian currency leaving no functional banking sector or monetary system to speak of. Bartering was not only the answer to the survival of individuals but for businesses and the central government as well. In fact, Woodruff's report reveals that in 1998, 50% to 75% of exchange in Russian industry was through the barter system and about one-quarter of the 1997 revenue collected for the federal budget took a non-monetary form.

The barter system was one of the world's first forms of service and goods exchange. In many ways this system was preferred as it allowed both parties to haggle back and forth to establish an agreement on what each side considered to be fair. These days, many Americans are returning to this system as a means of making ends meet. In fact, this system is gaining in popularity to such an extent that barter exchange companies such as NEBATE are popping up everywhere to guide and assist Americans in learning of the advantages of the system and following government regulations.

While the United States may the youngest country on the planet, it has been the unconquerable spirit of American determination and ingenuity that has made us the most powerful. When disaster strikes another part of the world Americans are the first to extend a helping hand. When the crisis hits our own backyard Americans will reflexively reach out for each other.

Land of the Free, Home of the brave.

America. It's how we roll.

Sources:

Tom Shoop, "Obama: "Only government' can solve nation's ills", GovernmentExecutive.com

Employment Security Department, "2010: Another record-setting year for unemployment claims - Dec. 22, 2010"

Corbett B. Daly, "September home foreclosures top 100,000 for first time", Reuters

Daniel Kruger & Liz Capo McCormick "Geithner Tells Obama Debt Expense to Rise to Record", Bloomberg

FOX News, "Record Number of Americans Receiving Food Stamp Benefits", FoxNews.com

Douglas A. McIntyre, "American Ghost Towns of the 21st Century", Yahoo Finance

Francine Knowles, "$5 a gallon for gas? Get ready, experts say", Chicago Sun/Times

Guy Taylor, "Tough times fire up avid US bartering network", Yahoo News

NEBATE, "Barter system Barter Exchange - Barter economy" National Electronic Barter and Trade Exchange