In 2001, with inflation soaring and the value of the Argentine peso dropping, Buenos Aires shoe salesman Pedro Perez found himself shut out of the market economy.
Shoe sales had plummeted as prices soared, and Perez found that his salary could no longer cover the needs of his family.
With the country’s monetary system failing him, Perez joined with many other Argentinians in providing for his family’s needs without the use of money by participating in a resurrected barter system.
At the height of the crisis, the New York Times reported that about a million Argentinians had turned to an alternative, moneyless economy to solve at least some of their financial problems, including Perez, who would carry sacks of shoes to the treuques (exchange clubs) once a week to barter for fresh fruits and vegetables.
“It’s a different kind of economy,” observed Peruvian economist Humberto Ortiz at the time. “This ‘grassroots’ economy is one not oriented toward profit, but oriented toward sharing well-being.”
The barter system sustained much of the Argentinian lower and middle classes through the money crisis, but the benefits of moneyless trade can apply anywhere. Moneyless transactions provide mutual enrichment while preserving cash for other needs, and exchanging unwanted goods delays their obsolescence and preserves resources.
Whether you’re looking to give your old belongings new life by recycling them through a barter exchange, or to emphasize the human connections in your economic transactions by intentionally seeking cooperative swaps, the ‘grassroots economy’ of bartering can be a way for you, like Perez, to advance economic well-being.
Long before the development of the market economy, people were trading their livestock, textiles, food, and more. Long before money was ever printed in the United States, arriving settlers were trading amongst themselves and with the indigenous people already living on the land.
Bartering in the 21st century is essentially no different from the bartering of ancient civilizations or early American settlers, though increasingly, the forum of choice for setting up a successful trade is an entirely modern one—the public square of cyberspace. Internet trading options help people make connections with one another.
Online, you can find bartering sites designed to cater to specific demographics (like busy mothers at www.mommysavers.com), specific geographic areas (like the cities served at www.craigslist.org), or specific types of barters.
Thom Rogers, an art teacher in San Marcos, Texas, says his experience with bartering through online sites has been very productive. Recently, when Rogers decided to add computer animation instruction to his middle school art classes, he discovered that he didn’t have the budget to afford the computer equipment and software necessary. He did, however, have an old laptop that he wasn’t using, so he posted the laptop to Craig’s List as a barter. Another Craig’s List user had the “solid workhorse” computer equipment Rogers sought for his classroom and was looking to exchange for a lighter, more portable computer.
“It was a solid trade for both of us,” says Rogers. “My exchange partner got exactly what he was looking for, and now my seventh and eighth graders are creating their own claymation movies with the new equipment I got.” Rogers also points out that the trade kept two unused computers from being landfilled.
On a larger scale, companies, nonprofits, schools, and community groups are also developing creative ways to operate without always using money.
Barter among companies means access to new markets and new customers for more than 300,000 US businesses, according to the International Reciprocal Trade Association (IRTA). In 2001 (no statistics after that, updated 2017), barter resulted in more than $7.5 billion worth of exchanged goods, as businesses find new outlets for their excess inventory (eliminating unsustainable disposal of surpluses) and are able to hold onto their cash reserves for other needed expenses.
Barter relationships between businesses, nonprofits, and other organizations can be set up individually on a case by case basis, but also, as with personal barter, you can find Internet resources designed to help you make the connections you need. For example, Kansas City-based Surplus Exchange is a barter system that offers surplus office equipment and supplies to organizations that need it. Surplus Exchange executive director Rick Goring says the exchange includes about 1,400 members and saves them around $400,000 a year (quote from 2004). (2020 Editor's Note: Surplus Exchange has been acquired by Connecting for Good.)
Additionally, in some communities with local exchange systems in place, businesses can not only interact with one another without money, but can offer their customers the same choice. For example, Philadelphia’s White Dog Café does business using the local “Equal Dollars” program, a Philadelphia-based system designed to encourage local trading relationships and to bring people without access to traditional capital into the economy. The White Dog Café accepts partial payment for meals in Equal Dollars, and seeks local vendors who trade in Equal Dollars for the café’s business-related transactions.
It works like this: Juanita, who runs a babysitting business, becomes an Equal Dollars member. She babysits for Mary, who cannot pay Juanita with money, but pays her 20 Equal Dollars from her Equal Dollars account. Now Juanita’s Equal Dollars account is credited with 20 Equal Dollars, which she spends on dinner at the café. White Dog Café’s account is then credited with 20 Equal Dollars, which it uses to hire Mary fix a broken appliance at the restaurant, bringing Mary’s account back to zero—and saving US dollars for everyone involved. The result is increased business for local suppliers and workers in a system that encourages people to save their US dollars by bartering. (To find programs like “Equal Dollars” near you, visit E.F Schumacher Society.)
In addition to encompassing the strictly practical applications of an exchange system, the Time Dollar program also has a social change mission at its core. As first conceived by Edgar Cahn—author of Our Brother’s Keeper and 1998 winner of Green America’s Building Economic Alternatives Award—the Time Dollars system is a way to get what you need without money that also maximizes connections between people and community involvement. Cahn developed the idea while “feeling useless” during recuperation from a heart attack. Determined to continue making a difference to others, and to emphasize that everyone has something to share, he founded Time Dollar USA.
In the Time Dollar system, members trade hours of labor. One hour equals one service credit in the system no matter what the service (i.e., house-painting, computer services, accounting), a structure that values everyone’s contributions equally. The IRS has ruled that the Time Dollars program is tax-exempt. However, in general, income generated by bartering is not tax-exempt.
The IRS says: “Bartering occurs when you exchange goods or services without exchanging money .… The fair market value of goods and services exchanged must be included in the income of both parties.” Since its beginnings in the 1990s, the Time Dollar system has spread out into local communities across the US, including a large New England Time Dollar system headquartered in Maine.
“The two core values that Time Dollars bring to every exchange are the principles of equality and reciprocity,” says Auta Main, director of New England Time Dollars. “[In the mainstream economy], we pay someone $10 an hour to take care of our kids, or $100 an hour to take care of our computer. Isn’t that crazy? With Time Dollars it’s different. Time Dollars remind us that we’re all uniquely and equally valuable human beings with something to contribute.”
Main says she’s seen complete weddings paid for by Time Dollars, babies delivered by midwives trading with Time Dollars, and even knows of a man who credits an hour of Time Dollar health care with saving his life. “He didn’t have health insurance, but the True North Health Center here in Maine takes Time Dollars,” says Main. “He went in for a check-up, and his physician found a lump that needed immediate attention or it could have turned cancerous.”
Main notes that the Time Dollars system is not quite as simple as person-to-person bartering, and requires the dedication of a group of individuals with some start-up capital to launch a database for keeping the accounting, and to actively promote the use of Time Dollars by the community. However, she also points out that a successful Time Dollars program can become virtually self-managing by its members after about the first three years, because “the members like it so much, and they get so vested in the process.”
“We find that once members have swapped four or five services, they really get into the groove. The average member swaps about nine hours their first year, and 30 hours their fifth year,” says Main. “People begin to understand that their economic transactions are about more than money. They’re building community, alleviating isolation, building trust, and connecting with neighbors in a world that can feel like it’s becoming more and more disconnected.”
Visit TimeBanks.org to see if there’s a Time Dollars system near you