Remember when you used to trade marbles? Or baseball cards? Or whatever else you had that someone else saw value in.

How about carbon credits?
Bartering is still going on between countries though you don’t hear much about it. Probably because it falls outside the realm of the global financial order i.e. the IMF, OPEC, and other oligopolies and their various taxing authorities. They probably would not be amused at the growth of the bartering concept.

Recently I was speaking to some college students. We were talking about global bartering as a possible solution to unlocking the stuck banking system that is fueling the recession. After all, a small business can barter just about any product or service on the internet now. Why not countries?

One of the students is Venezuelan. He pointed out that their notorious leader Mr. Chavez was already well into the international barter game. Apparently his country’s oil barters Cuba’s advanced medical services along with a few other key necessities from other South and Central American countries. Makes sense to me.

Indeed many socialist types have long pushed for a fairer balance to the world i.e. why should 20% of the population use 80% of the resources and leave the developing world impoverished, hungry and prone to killing each other for survival. Why can’t we just share?

Because we are greedy. And we think our stuff is worth more than the other guy’s stuff. And some countries (by traditional measures at least) have nothing. Think Haiti. Or they are prone to losing it all to corrupt leadership – usually socialist governments who warp once they get their hands on the purse strings.

But what if everything had an assigned barter value – including intellectual property, human capital and even misery. If we can do it with carbon credits why can’t we do it with people, their problems and their economies? Maybe then the UN would have a true global role rather than playing footsie with developed countries then cleaning up the mess afterward in the undeveloped ones.

So let’s role-play a bit – starting with carbon credits. If you were the owner of the Brazilian rain forest or the Canadian boreal forest would your carbon eating credits be of value to the rest of the world? Of course they would. Assuming of course that the rest of the world believed in global warming.
If you were the United States with the most powerful army in the world – what would countries barter to hire you to protect their interests? Oil? Diamonds? U.S. treasury bills? Better yet, what would they barter for your military intellectual property? Perhaps Israel knows the answer to that one?

What if countries were not limited by global agricultural monopolies and restrictive trade practices? Would Jamaica be able to once again grow bananas in quantity and barter them for advanced infrastructure or educational needs? Would far eastern countries be allowed to further global herbal medicine use in exchange for North American dental technology?

Would China be interested in bartering their huge cash and human capital reserves for outright ownership of resources. Hint – they are doing it now on a global scale.
Would Canada become the wealthiest per capita country in the world? Quite probably – if we weren’t so prone to short-term political solutions, easy resource pickings and endless carping and whining.

Without putting too much thought into it (while adding a global web-based trading portal) it doesn’t take too much imagination to see how the practice of global bartering could take off. Because everyone doesn’t always have something to sell or money to buy – but they usually have something to trade.
Once you start bartering, all those mothballed trains, trucks, ships and planes will start moving again. Of course they burn oil, require maintenance, blow tires, need drivers … and on it goes.

Much depends on products and services having a value made up of both a tangible and intangible qualities – to both parties. And international taxing authorities turning a blind (or revised) eye towards bartering while the world economy gets jump-started.

In the meantime, I’d gladly barter re-writing a Jamaican resort’s website in exchange for two weeks in one of their now vacant beachside cabanas.
Complete with a fridge full of ice cold Red Stripe.

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Tags: barter, Economy, recession

This entry was posted on Tuesday, March 24th, 2009 at 7:25 am and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.