What is bartering?
Bartering is the exchange of goods or services between two or more people without using money or any other sort of modern medium (credit cards, checks, wire transfer, PayPal, etc.).
In its most basic form, bartering is a form of trade. While it is considered old in its roots and its use, bartering is has been occurring for centuries.
Why would you need to barter?
Bartering is a way to obtain goods, products, or services when you don’t have the “currency” to make the transaction happen. This a huge advantage for folks who are in a situation where cash or currency is lacking.
Another great benefit to this method of trade is that you can exchange or barter “things” you don’t need for things you need. Maybe you have an excess of products or goods, or maybe you have an excess of time. Either way, you can exchange those things for things you need.
Problems with bartering
There can be issues with bartering, which may often be overlooked. These are often listed as:
- Lack of double coincidence of wants
- Lack of common measure of value
- Lack of standard of deferred payment
- Difficulty in storing wealth
- Indivisibility of goods
To explain the issues or problems of trade by barter, we need to expand on these issues a little further.
Lack of double coincidence of wants
Lack of double coincidence of wants describes a scenario where what one person is offering matches what another person is wanting or needing. When these desires are met, it is mutually beneficial. If not, an exchange may not occur.
Lack of common measure of value
Lack of common measure of value means value can often be perceived differently. Again, both parties have to see the “things” being exchanged as equal value. If not, additional items have to be added or taken away, or some other agreement has to be made.
Lack of standard of deferred payment
Lack of standard of deferred payment can occur when a payment or exchange is deferred, but there is an issue of future value or quality of goods. If a future exchange is being discussed, there are a number of attributes that have to be agreed upon. Think of things like quality, quantity, etc.
Difficulty in storing wealth (or generalized purchasing power)
Difficulty in storing wealth is another problem where there can be issues with storing certain products, goods, or commodities for future trade. Certain things have short shelf-lives, are difficult to store, or are seasonal. These require frequent bartering.
Indivisibility of goods
Indivisibility of goods comes into play when something being exchanged cannot be divided to trade for something of lesser value (or vice versa). Some things can only be traded as a whole, and if they are of greater value than the item being exchanged for, there can be problems.
Bartering in SHTF
If you are looking for a legitimate example of widespread bartering as a result of SHTF in the States, you may have to go all the way back to the Great Depression. Sure, bartering occurs every day in communities everywhere. However, this is not conducted on a large scale.
During the Great Depression, there was a lack of money. This obviously created issues in and of itself. As a result, bartering was often conducted in order to obtain food, supplies, and other items.
People had to engage in this type of behavior to survive. As a result of the financial collapse, they had no other options. Individuals and groups also formed loose organizations that operated similar to banks. They acted as semi-formal systems of trade where no money was used.
Bartering for preppers
When it comes to storing items that can be used and/or bartered, compact or smaller items can be extremely valuable. Part of this is due to the issue listed above…lack of indivisibility. Smaller items are easier to trade, especially if they have high intrinsic value.
Compare these items to something like a cow. If you want to engage in bartering and it involves a cow, you either have to trade the whole cow, or you have to butcher it and portion it out. Then you have to deal with whatever is leftover. So, you either have to store the excess, use it up, or try to trade the remains. This adds additional layers of difficulty.
So, let’s look at some of the smaller, compact items that may prove to have value for bartering.
Small items good for bartering
When you are looking at the items below, there are things that may have a short shelf life and some may not. You need to keep this in mind. If you are storing these types of items you need to make sure you manage them accordingly. As things reach their shelf life, you will have to rotate them out, use them, etc.
Keep in mind, things like cigarettes may go “bad”. However, they can still have value. In my previous law enforcement career, old, stale cigarettes, which had been left in my vehicle for a long amount of time, were often used as an olive branch with suspects during interview, etc. I never received a complaint in 12-years.
- Precious metals like silver and gold (coins work the best)
- Weapon magazines
- Ammunition in popular calibers .22, 9mm, .40 S&W, .45 ACP, .223/5.56, .308, 12 gauge
- Clothing like socks
- Cash – In short-term emergencies it still has value
- Lighters (think cheap Bic lighters)
- Printed reference materials (survival guides, how-to guides, etc.)
Food and Medicine
- Crop Seeds
- Canned Food
- Medication (OTC): Acetaminophen, antacids, anti-nausea meds, Cetirizine, Diphenhydramine, Ibuprofen, Iodine, Lidocaine, Loperamide, multivitamins with minerals, Triple Antibiotic Packets, etc.
- Caffeine Pills
- Nicotine lozenges
- Small first-aid kits
- Emergency blankets
Still not convinced?
Let’s look at something a little more recent than the Great Depression. This article by Reuters highlights the fact that bartering is the new currency in Venezuela. There is no cash there. Everyday items have the most value a situation which is a new normal for them. Hyperinflation has killed their economy and food and medicine are scarce. Limited supply means high demand and high intrinsic value. I would call this a SHTF situation.
Rural areas have been hit extremely hard and individuals more so than businesses. This has made digital currency almost worthless with merchants and individuals alike preferring “payment” at the time of transaction. They have been forced back to one of the most basic forms of economy…bartering. Many folks preferring food as the most valuable form of payment.
It comes with the same difficulties that have stood the test of time. You have to have something that someone else wants. If not, you are out of luck.
Bartering requires you to have a certain level of trust and respect for the person on the other end. An element of caution needs to be exercised as well. If there is a situation that doesn’t feel right or if you feel it puts you in danger, it should be avoided. Desperate people do desperate things. This can lead to unfortunate scenarios being played out.
However, bartering is a necessity in many places of the world and there may be a point in time where it is necessary in your part of the world. Having an idea of what you should have, what has value, and how to store it is important.