Humans have been bartering since the beginning of time. People traded items they had for their practical value: food, decor, apparel, tools, weapons, etc. They traded directly by exchanging with one another. The problem was if someone didn’t have what you wanted, a trade wasn’t possible unless you knew someone else to further along the trade.
During the period of 9000-6000 BC, livestock was widely used and as we became more agriculturally oriented, farmers began utilizing their crops in trade. Bartering is in its fourth cycle in the U.S. During the 17th and 18th centuries, money was scarce, so the colonists relied on bartering. During the 1930’s and The Great Depression people formed barter groups like The Unemployed Citizens League of Denver and the National Development Association. The 1980’s was a period of long recession and barter regained popularity once again and was featured in numerous magazine articles and books.
The barter system is enjoying renewed interest today. There are thousands of bartering groups, they trade goods and services both locally and virtually. Throughout 2009, bartering was featured in several news shows and U Tube videos were streaming stories from groups all over the country. Some people didn’t join any groups but they saw value in trading and started trading with people they knew directly.
The basic motivation remains the same – the need for something that you don’t have and the excess of something someone else wants. Bartering allows you to negotiate the worth of your item or service in relation to products or services you want. When cash flow is down to a trickle, barter can be a way to stay in business and establish valuable new social and business connections. It is particularly prevalent in times when monetary cash or cash equivalents are low.
It is also important to dispel the rumor that barter is a tax free event. The IRS has very specific guidelines with respect to barter and barter exchange groups. And while I believe it can be utilized in such a way as to not pay taxes on services received, it is important to understand how that really works. The guidelines from IRS can be found at: www.irs.gov, enter barter in the search bar.
In times when we are economically challenged and even if not, barter is a worthy endeavor. Not only are you able to conserve cash for cash only items like rent and insurance but you are being ecologically and socially responsible if you utilize trade to recycle unwanted household and personal items.
Summer will soon be upon us and now would be a great time for you to explore the world of barter, don’t you think?
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