barter

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Related to Barter economy: Monetary economy

Barter

The trading/exchange of goods or services without using currency.

Barter

To trade one item for another of roughly equal value. That is, bartering occurs without a medium of exchange like money. For example, one may trade 10 apples for 10 oranges. Bartering exists in all societies, though it is less common than monetary transactions. See also: Horizontal Security Exchange, Payment-in-Kind.

barter

an exchange mechanism for buying and selling goods and services which involves the physical ‘swapping’ of one product for another. Generally, barter is a cumbersome and inefficient means of organizing exchanges in an economy, since a large amount of time is wasted in seeking out and finding compatible ‘swap’ partners (i.e. each selling what the other wants to buy), and then haggling over an appropriate exchange rate (for example how many tomatoes equal a sewing machine?). All these difficulties can be overcome by the use of MONEY as a common denominator to conclude transactions and ‘price’ individual products.

For all its disadvantages, barter (or COUNTERTRADE as it is often referred to) is still widely used in the context of INTERNATIONAL TRADE. Firms which are unable to obtain the necessary foreign currencies they require to finance a trade deal (because the government operates FOREIGN EXCHANGE CONTROLS or because the country has simply run out of currencies due to a balance of payment deficit), often enter into a bilateral ‘swap’ deal with firms in other countries arranging a suitable product exchange.

barter

the EXCHANGE of one economic good or service for another. Barter as an exchange mechanism, however, suffers from a number of serious disadvantages:
  1. for barter to take place, there must be a ‘coincidence of wants’, that is, each party to the barter must be able to offer something that the other wants. For example, an apple-grower wishing to obtain oranges must not only find an orange-grower but must particularly find an orange-grower wishing to acquire apples. Finding appropriate exchange partners can involve lengthy search activity, which reduces the time available for actually producing goods;
  2. even if the parties meet up, they then have to agree on an appropriate ‘rate of exchange’, for example, how many apples are to be exchanged for one orange? Haggling over exchange terms is again time-consuming, and where agreement cannot be reached between the two parties each will then have to seek out new exchange partners.

Overall, barter is a very inefficient means of organizing transactions in an economy and has been largely superseded by the PRICE SYSTEM in modern economies, using money as a medium of exchange. See COUNTERTRADE, BLACK ECONOMY

References in periodicals archive ?
But an entire local economy has sprung up, and the residents have migrated from the barter economy to a cash-based system.
In essence, then, Mises is describing the difference between savings as they would take place in a barter economy (commodity credit) and (one of the ways of) financing, as it takes place in the money economy, where "circulation credit" can be extended at no cost and can finance investment in a way not related to real savings.
In the special case where [[phi].sub.x] = [[phi].sub.m] = 0 we have a barter economy, where no cash is required for the purchase of a good, whereas when [[phi].sub.x] = [[phi].sub.m] > 0, and hence [delta] = 0.
His anarchist Swap Shop (1969), where exchange was based on a barter economy, teeters on the threshold between art and activism as a social sculpture that prefigures works by artists like Rirkrit Tiravanija and N55.
Because of high inflation, a weak currency and partly because of tradition, Uzbekistan has a cash or barter economy. Credit cards are almost unheard of, and the U.S.
Priest regards commodity money and book debt as forms of barter exchange and the economy in which they prevailed as a barter economy. (31) They were not.
* either, in the case of white supremacy, in the form of going "off the grid" altogether, refusing auto licenses, social security numbers, and official money instruments in favor of a locally initiated "tax" system and barter economy;
She describes the uses of a barter economy and its effect on everyday relationships between families.
In a barter economy, the goods that are traded in the interval from t to t + 1 must exist at time t.
In Li [1998] I show in a pure barter economy that under certain circumstances, middlemen emerge endogenously to ameliorate the lemons problem in the exchange of goods.
They traded with the British, Dutch and French, fought off pirates, and stubbornly retained a barter economy, as well as their own language and customs.
The Soviet economy in practice was always a barter economy. "The ruble really isn't money, in the sense we think of it in the West," Potvin explained.