In ancient times, each human did every essential thing for survival on their own, such as growing their own food and building houses. This was before the diversification of society based on different skill sets. Presently, we purchase different goods or services with money. Exchanging goods and services for a set amount of money is a flawless concept, so much so that it may appear as if no other trade system existed before. While humans have been conducting business in this manner for decades, there was another system of trade; the barter system.
What is Barter System?
This ancient system relies on the exchange of goods or services among two individuals or companies without the use of currency. Additionally, the use of a monetary medium, like a credit card, is also nonexistent. Unlike the currency system, where the value of a product or service is a set amount of money, determined by the market, in the barter system, the value of a product or service is determined by the engaged parties. As expected, it is not the ideal form of trade because one or both engaged parties may end up with a product or service with a lower value. Hence, led to the introduction of the currency system. Despite this, the barter system is still present in modern times.
Examples of Barter System in Daily Life
1. International Trade
International trading is one of the essential elements to boost the economy, which becomes evident seeing the strong economy of countries like Switzerland and Singapore that heavily rely on it. Presently, there is not a single country in the world that does not participate in international trade. When it comes to buying commodities or services on a global level, nations or companies are more than likely to engage in the barter system. This allows countries or companies with fewer finances to gain the required resources. Plus, each nation possesses a natural resource that may be required by another country, resulting in the use of the barter system. For instance, the United Nations launched the Oil-for-Food Programme for Iran. It allows Iran to sell its oil in exchange for food with other countries.
2. Child Care Cooperatives
Each parent wishes the best for their child, therefore, they try to take care of the children on their own to ensure they are safe. However, because of a hectic work schedule, parents are forced to leave their children behind. Thankfully, daycare services are present to aid such individuals. Although the business of daycare is excellent and a lifesaver for most, some are unable to use such services for reasons such as finances, as an average daycare costs $17 per hour. Moreover, finding a reputed babysitter or daycare can be a daunting task. This is when child care cooperatives come into play. In such groups, members take turns taking care of other members’ children. Such groups are formed with trusted members that know each other on a personal level. The timings and number of activities to engage a child in are negotiated among the members.
3. Time Banking
Learning a new skill takes months, and enhancing the same skill can take years. Unsurprisingly, the value of such skills is high, and not everyone is able to afford skilled workers. Time banking is a concept in which labor-time or time used to carry out a skilled task is seen as a currency, therefore, the value of each participating individual or party’s time is repaid by providing equivalent services. For instance, a person agreeing to fix someone’s car in exchange for a lesson in cooking is considered time banking.
4. Rental Properties
When it comes to purchasing a property or even looking for a rental space, negotiation is inevitable. To cater to the buyers’ needs, the owner is more than likely to reduce the price of the property to improve the overall unit. For instance, fixing a leak in the bathroom requires a skilled worker, i.e., a plumber. Therefore, the owner of the property may charge the buyer a little less money for the fixing.
5. Professional Skills
In the present age of digitization, using social media to promote one’s business is crucial in reaching a larger number of customers. Professionals in this field often approach businesses with their skills in exchange for their services. Interestingly, companies that are not financially stable may also take this approach by asking professionals to market their brand while providing their services. Fields such as social media marketing, writing, graphic designing, and web designing are used heavily in present times for said purposes. For instance, a restaurant with poor finances can offer free food in exchange for social media presence, professionally designed menus, and their own website by professionals in their respective fields.
It isn’t a surprise that the working class, especially involved in traveling work, needs to be away for prolonged periods. Leaving one’s house for weeks can be a worrying aspect. For this reason, the concept of house-sitting was introduced. Although traditional house-sitting is done for money, there are applications that connect owners with trusted people that are looking for accommodation. As adventurers and travelers are often on the go with little to no money, this concept is also beneficial for them. With this approach, owners can be free of worries about their house, while travelers get to live in a house free of cost.