barter


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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 ?
The old barter trade has evolved to the use of cash, becoming a misnomer, but is still referred to as barter trade in its licence.
"Barter trading has been in existence but there has been no regulations, no framework, no taxation, no nothing at all," he added.
Part of the barter trade system setup later on is to ensure that these non-convention size vessels are also tagged and recorded, it is also for security purposes,' he added.
64 reviving barter trade in Mindanao, saying doing so would create jobs and business opportunities, and strengthen trade and commerce between and among member-states of the BIMP-EAGA (Brunei Darussalam-Indonesia-Malaysia-Philippines - East ASEAN Growth Area).
Jamalul said a key concern in the resumption of the barter trade between Mindanao and Malaysia's Sabah is the security and safety of the personnel and merchandise that will pass through this gateway.
The Iranian side acknowledged that trade relations between the two neighbours did not match the actual potential and requested for constituting a committee for barter trade.
The barters have also contributed to record-low uranium prices and put uranium producers
Under the EO, the Mindanao Barter Council (MBC) would be set up to oversee the barter activities in the southern part of the country.
64 reviving barter in Mindanao, promoting its growth, and constituting the Mindanao Barter Council (MBC).
The officer then pretended to be an interested person and began messaging 21-year-old Barter. After messaging him for few days, the officer told Barter he had a child he could provide.
aACoeDuring the third week in November, travellers can stay in B&Bs without putting their hands in their pockets if they are skilled in manual, teaching or creative tasks, or arrive with something from home for their bed-and-breakfast hosts,aACA[yen] Barter Week's organisers said.
It's a win-win for everyone involved, we've come to agree, and all because of that centuries-old system of acquiring what one needs, sans the almighty dollar: the barter system.