For those who lament over the idea that money has depersonalized and corrupted our personal exchanges and trade, I say cheer up! A barter economy still lives on, and is yet quite healthy. Far away from recipts, balance sheets, and tax forms exists a black market refuge for grassroots capitalism.

Just today at work, a co-worker called over to Jerry’s Subs & Pizza to take advantage of their Monday special on large pizzas. After learning he was calling from the anonymous autoparts store that serves as my day job, the Jerry’s guy mentioned he really needed a can of carb cleaner for his car. Ah, wonderful. We have something he wants, and as the keeper of the most holy large pizza complete with utility belt of toppings, he has something we want. The barter soon commences. We bring up a can of carb cleaner in exchange for a free topping (pepperoni, mmm) on the pizza. All off the books, all just a spontaneous, mutually agreeable trade.

While I know of no real studies into this phenomena (and am too lazy to search for one) I think it would be a facinating issue to look into systematically. How much of our nation’s GNP is just a casual exchange of goods and services for other goods and services without the money middle man, or rather as an outside modifier to the common currency? Trade is as basic to human nature as breathing, no rules or government or anything else will ultimately stop trade. It can certainly slow it down and make it far more costly however.

It happens all the time at my store, and I imagine at businesses and offices all through this country. Possibly even more in other countries. We dramatically mark down the prices of parts to some of our customers, they work on our cars for free or at far reduced prices.

This I suppose is the same basic level of favor trading that opperates in Washington among politicians, lobbyists, and other powerbrokers. They just travel in different circles than most of us. Is it corrupt? Maybe. Is it unusual? Not at all. When I give out a can of carb cleaner in exchange for pepperoni I am, strictly speaking, stealing that can of carb cleaner for my own ends. When I mark down brake pads to less than half their retail price, and end up with a free oil change, we are both defrauding our companies. If a house member votes on a piece of legislation because a lobbyist can get his daughter into a great school, then the same principle of barter comes into play.

Whether all of this is a negative or positive is up for debate of course. For those who view corporations as monolythic, heartless, inflexible monsters of commerce, I suppose for you it is uplifting to consider how much flexability and human understanding really does come into play at the individual level. Like I’m sure everyone knew someone in high school who could get you free food at McDonalds, or free tickets for the movie theater. Such basic favor trading and barter is natural and will always occur. I think, in general, this is a good thing.

Of course it becomes a bit more complicated when the stakes are raised from Big Macs, carb cleaner and pepperoni to political favors and seven-figure bonuses for CEOs. As we saw in the corporate corruption scandals of the last few years, this can get out of hand and result in some serious problems for companies and their owners (i.e. the public). I suppose we must make a distinction between purely selfish trades, and trades with potential for wider spread good.

When we slash the prices of autoparts we do cost the company money, but on the other hand we build trust with the customer, and in the end the company benefits when that customer buys from us more over our competitors. When a legislator makes a deal with a lobbyist, the public interest may very well be served when that lobbyist helps that legislator out down the road in persuading other lawmakers to get behind a great, positive bill sponsored by that legislator. Among leaders whose job is to represent many (stockholders, constituents) walking that line between making trades for the good of the many and the good of the few is a tough balancing act. But the motivations and outcomes of each trade are very important to judging each.

No IRS agent or corporate accountant will find it out, but small scale bartering goes on all the time in the business world and everywhere else. I think its the free market at its finest- on a fully free and personal level.

This entry was posted on Monday, February 28th, 2005 at 11:03 pm and is filed under Personal. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.