4.16.2007

thought experiment { trade and barter in the modern age

Kyle MacDonald traded his way from 1 red paper clip to a house.

Back to some of the earliest times of humankind, we've traded and bartered with others for goods and/or services we've needed. Overtime the face to face bartering was replaced by currency of set value.

What would it take in this modern time to achieve a trade and barter system again?

Would/can the gov't tax it? If so how do you tax an exchange of 1 hour of web support for a dozen farm raised eggs for example?

Just was pondering this while walking in to work. Please discuss.

4 comments:

DAV said...

the answer lies in Baseball cards...

GeistX said...

Baseball cards could be an item of trade, much like how children trade them. But if they are immaculate, then I'll feel screwed.

Knight of Nothing said...

I heard about that guy a while back, maybe a year or so ago. A neat gimmick! If you follow the entire thread, there were a few "gimme" trades. But he really did do it!

Bartering is tricky in this day and age. I don't think it could succeed as a viable economy. Goods are one thing, but in the modern world, knowledge is so specialized and services are so important. This could be an apocryphal tale, but a while back a friend told me about a plumber he knew who tried to barter his services with a doctor. The plumber wanted to trade his time 1:1 with the doctor's, but the doctor thought his time was much more valuable than the plumber's. So they both needed each other's help, but they couldn't come to an accord as to how to trade their time.

Whether the story is true or not, it illustrates the point that it is complicated to fix a trade value on services. Think of how many services we use each day that we couldn't function without: power, water, heat, communication, medical care. Think of how many devices we use that we depend on others to maintain: from our homes, cars, and computers, to all of the infrastructure to provide the utilities listed above. What could you trade for all this stuff?

To use just one small example: I can fix a leaky pipe or swap out an old faucet, but I couldn't plumb an entire house. So how do I measure the value of people who *can* do that? Their service is infinitely valuable to me, because I have no means or skill to do it myself. Conversely, my skill is in software development. What could I offer a plumber? Nothing. So I would be washing dishes or performing some other menial task for years to pay my debt to him. But because of the dollar, we can do business rather more simply.

It's much easier to agree upon a more abstract price, such as a dollar amount, than to try and fix a cost against someone else's economic value.

GeistX said...

Knight,

you raise good points. The concept of value is so ephemeral.