Can barter save the planet - and your business?

In the current economic climate, with money running short, people are increasingly turning to barter.

At the local, individual level, barter networks such as Lets are growing fast. But this development is not merely homespun. Major corporations and nations are striking deals without cash - last year China and the Congo agreed to exchange infrastructure projects for raw materials worth around $9bn - the largest barter deal ever.

Retail barter is flourishing too, and keeping thousands of small and medium-sized businesses afloat, thanks to corporate exchanges that enable members to transact for credits that can then be spent on some other transactions, with other counterparts - so the bartering is not limited to direct swaps.

How is this green? Well, the money economy is 97 per cent based on debt, rather than hard cash. All that debt needs repayment, and the money used to repay it will in turn require repayment at interest - which is why debt has grown exponentially, and economies have been compelled to grow at similar speed, with ruinous effect on the environment.

If you want to help build a more stable economy, with reduced impact on the natural world, you could do worse than opt out of the debt-based economy.

But that's not the only reason to do it. Now that cash has run dry, you can get things done by barter that simply wouldn't happen otherwise, and perhaps stay afloat.

Bernard Lietaer, the former central banker who co-designed the convergence mechanism for the Euro, has great respect for Lets, despite their flaws. “The Wright Brothers proved airplanes could fly,” he says. “Their constructions were rickety, but they worked – and they paved the way for serious high-quality planes. This is the pioneering value of the Lets systems.”

Others have already started building those high-quality planes, says Sabine Kurjo McNeill, who is organising a conference later this year to bring community-based groups together with the retail barter industry.

The biggest retail barter exchange in Britain is Bartercard, a computerised scheme with 130 offices worldwide, and 75,000 small and medium sized businesses in its network. Bartercard vets its members and absorbs the risk, so that if one member goes bust, the others don't lose their credits, which are known as trade-pounds. Members can trade by SMS, and check their balance the same way. In return for all this, Bartercard charges £500 in cash as a joining fee, a small monthly admin charge, and a cut of each transaction.

Chris Barrett, who runs a cleaning business in York, got involved after a Bartercard rep phoned him out of the blue. Since then, Barrett has used barter to acquire uniforms and stationery and several 0800 numbers. He retains a payroll agency on Bartercard and an accountant too. “We regularly treat the staff with flowers and cards and birthday presents that we get through barter.” This saves cash for wages – and council tax – and puts the onus on Bartercard account managers to find Barrett cleaning jobs, so that he can put his barter account into balance.

In other words, the more Barrett “purchases” on barter, the more work he gets to pay for those purchases.

“Barter does have the potential to save the economy," says McNeill. "People never have enough money – ever. But barter is available in infinite supply."

Comments

[Woody]

Local swap shops and lets are booming because things are recycled and interesting exchanges are made. Shame the article wobbled off into a 'Bartercard advert'! Incidentally Richard, what planet are you from.....looks like you wrote the 'Ladybird economics book'!

[WW Rutland]

This is a silly article. Trading money for an item is barter too. The only way to be green is to not trade for a newly made article, you have to trade for an old article.
I offer to trade all the time-crossbows for guns, boats for concubines, books for money, see how green I am.
I love to barter and I've been accused of being cheap, tight, and a dirty old man-I love it!
http://wwrutland,wordpress.com

[Richard]

Lets and BarterCard are still money. Money is not the same as cash or a particular currency. Money has been with us since the dawn of civilization and will be with us until the end of civilization. Lets uses debt but the debt is repayable in kind rather than cash and value is attached to the barter thus making it money. "Money is a matter of functions four, a medium, a measure, a standard, a store." That is, money functions as a medium of exchange, a unit of account, a standard of deferred payment, and a store of value. i.e. Lets or BarterCard. This people are just using creative accounting which is what got us into the economic mess we are currently in. Buy a Ladybird economics book John.

[joe]

Ah-ha good question, I've also been wondering how to make bartering more effective.