10 March 2017

FUTURE TRENDS - The Rise of the Barter Economy

Economies around the world are struggling.

What fills the gap when banks and currencies fail? In many instances, the answer is barter.

Unlike the common perception that currency economies are an evolution of barter economies, it now seems that the reverse is true.

Barter economies develop in the wake of currency collapse, such as the rise of barter following the collapse of the Roman empire. (Interestingly, it seems that the actual precursors to currency economies are gift economies.)

Contemporary economies suffering under the current global financial crisis have seen a surge in barter as citizens find creative ways to get their needs met.

Greece has developed a substantial barter economy, facilitated by online barter clubs and direct trades.

The Greek economy has stabilized somewhat in recent years, but the barter system continues to thrive, perhaps due to the ongoing global trust crisis.

Spain has also developed a barter system in response to economic hardship, and a new generation of Spanish farmers and other workers are embracing their new normal.

Their focus on food – growing it, preserving it, storing it, and preparing it – fits with a movement of people preparing for economic (or environmental) collapse.

In India, where the government pulled a huge number of bank notes out of circulation in order to combat corruption, citizens quickly developed their own barter economy to fill the gap.

But barter economies are not limited to situations of extreme stress.

Two companies, Simbi and City Network, offer online barter systems that are less about survival, and more about connection.

According to a profile for Motherboard, City Network (an expansion of the popular Bunz Trading Zone) hopes to “bring users out of their existing circles to interact with strangers, meet people with common interests, get information that will make living in a city easier, and trade without cash.”

Simbi founder KJ Erickson told Y Combinator that she hopes the site will “enable people to do what they love and get what they need without being restricted by costs.”

Echoing the young people in Spain, Erickson says, “The millennial generation is reconceiving work. They want to do things that are both flexible and fulfilling.”

Both Simbi and City Network have plans to monetize, but aren’t forthcoming about how.

Ad revenue, sponsorships, hosted events, or partnerships with charities or festivals are possibilities.

Neither service charges its members, and, as one City Network member told Motherboard, “charging a membership fee for a cashless community is counterintuitive.”

Last year, Simbi raised 1.2 million in funding, and TechCrunch theorized that the site could charge for credits if users want access to services without providing a swap.

Both sites will need to find a way to monetize or they’ll run into the same issues that barter economies across the globe encounter – you can trade for food or skills, but some things, like electricity and other vital services, aren’t (yet) available outside of the currency economy.

People are creative, though.

In Detroit, where economic hardship has been a reality for decades, citizens have created their own gift economy, and communities will continue to find ways to meet their needs through barter, trade, gift, or otherwise.  

About Tiffany Sostar
Tiffany is a published academic, an editor with the Editors Association of Canada, an independent scholar and researcher, and a self-care and narrative coach. She is particularly interested in the intersection of technology and identity - how our tools shape our selves and change our stories, and in how the nature of work is changing as we incorporate more technology into our daily lives.

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