How Human Response To A Messed Up Global Economy Part 4
By Lawrence
Continue from part 3You have now read all about the great things on bartering. I think it is time to discuss the dark side of bartering. Just like other forms of trading, there are many problematic issues making barter a bad idea.
Barter Depends On Good People
Barter and organized co-op to share production can work only if trust is build among the participants with mutual respects. Trust is also the underlying principle why trading of goods and services with money works. The famous phrase "in god we trust" on the US dollar bills is a good example highlighting the importance of trust in transactions among people.
Consider the following situation that can easily happen within a backyard vegetable growing co-op. One of the families chooses to not attending to their crops diligently. At the end of each harvesting period they would produce less than the others while reaping more produce from their neighbours. Over a period of time, their neighbours would figure out the issue and break the trust.
Should you expel the family from the co-op?
Would the families take sides because of their personal relationships with the family?
With just one bad apple, a perfectly functioning co-op or barter group can fall into chaos. More matured barter groups or co-ops would create rules and regulations for the members to follow. As you can probably imagine, when there are so many rules and regulations, it defeats the purpose of bartering already.
This is one of the reasons why barter was ditched in our society in favour for standardized currency. Not that people are bad, but in various situations people would be nudged to behave badly. The negative human behaviours like cheating and general disregard of other people’s efforts make it difficult in the long run to maintain a good barter relationship. There are two solutions to the problem.
In a closed society like a small tribe, the tribe leader with absolute power can expel the person from the tribe.
In an open world where there is no absolute control, using standardized currency is the way out. It removes the need to trust the counter-party. Instead, trust is based on the currency itself.
Barter Is Not Sharing
In a barter group, goods and services are exchanged at agreed upon terms and conditions. At times, some people within the group could be facing hard times and not able to keep up their ends of the agreement. Even though the others in the group are good people and understanding, there is a limit to what they are willing to tolerate.
People will be willing to accept lesser goods and services just to help out once or twice. But what if the situation of the one who is facing hard time never turnaround? They will likely stop the support. The person becomes a burden to the group.
In other words, if you are no longer productive in a barter world you will have to accept a smaller share. But people’s want or need may not match their ability to produce. When there is not enough to share a good barter relationship will breakdown.
If our world pretty much reduced back down to barter only, many people whose skills are not good for immediate survival needs will have no place in a barter or co-op environment.
Barter Requires Social Connection
In bartering, people has to negotiate the terms and conditions for the exchange of goods and services. In co-op, people has to communicate often to share the growing progress. In both situations social skills are required to make it possible.
Not everyone likes to engage in communications like that. In fact, our society is moving towards detachment of communication on everyday activities. Everything going online and electronic making it not necessary to talk or even communicate with anyone for days or weeks. To get people accustom to not engaging with social activities to open up to bartering can be very difficult.
One good example is various online buy and sell websites like ebay. Your reputations within the community are more valuable than the actual services or goods offered. People who have never transacted with you before will choose someone with better reputation over your better offer most of the time. This reputation takes time to build and a lot of care to protect. Active engagement within the online community and being responsive to the requests and questions from the others are not easy if you have to do that all the time.
Summary
Barter and co-op depends on the people who join the group. The nature of bartering requires mutual respect and trust. These basic requirements makes bartering not suitable for everyone and definitely not suitable for many kinds of goods and services.
