Could we eliminate currency and have an open barter system based on real fair trade?

Answer 1

We will never eliminate the need for currency.

Currency makes it easy for consumers to purchase their wants and needs. It also allows people to overspend...how many people think "I will have to work 16 hours to purchase this".

There are free online sites out there such as U-Exchange that are opening up direct barter between two parties. The benefit of direct barter for a business is their profit is built into their expenses. Example: Joe the carpet cleaner does $500 dollars worth of work for Bill the electrician and recieves $500 worth of electrical services in return. Both parties have a 50% markup on their services. Joe and Bill both "paid" $250 to receive $500 worth of work freeing up cash in their business for other purchases. As far as tax implications Joe and Bill should treat the trade just like a cash transaction and report the income on their income tax.

There are also barter exchanges people can join to overcome having to barter direct. These are geared toward businesses and have a membership / transaction fee. The barter exchange deals with "scrip". Example: Joe the carpet cleaner does $500 worth of work for Bill the electrician and receives $500 worth of scrip in his account. He can then use the scrip to make purchases from other members such as Sally the motel owner or Ted the mechanic. One problem with exchanges is members sometimes have a cash price and barter price for their goods and services. It's up to the exchange to make sure members are not inflating their barter prices. Barter exchanges issue a 1099-B form to members and the IRS for tax purposes.

We'll never eliminate the need for currency but we can elimintae the need to rely on it so much.

Answer 2

Nice dream if you mean globally, in a local setting yes it can work and has worked since humans have been around, but without fixed value sometimes the bartering gets excited and leads to violence or skirts the laws of decency. Like that guy in an Adirondack town years ago that traded his wife and $20 to the local storekeeper for a pig, and demanded a receipt so that when winter came the storekeeper didn't try sending the wife back when it would be more expensive to keep her. I wonder if it was a sow? But there will always be currency of some form because those who amass wealth need to convert it to something easier to safeguard and travel with, because trade between places is where money is made when each has surpluses of items they wish to exchange. I forget the island but they use those huge stone wheels as coinage, not practical for carrying in dugout canoes, let alone a sporran.

Answer 3

Open barter systems cannot work in an era of such specialized division of labor.

I can't take any number of chickens in trade for cell phone service for a year.

How many computers does a tech guy have to fix in order to buy a week's worth of groceries from Kroger? Does he go hungry if someone else already fixed Kroger's computers?

What if I need water and have nothing the water monger needs in trade. Do I have to die of thirst? Or must I work out a complex "chain" of trades to get the commodity I need?

The beauty of money is that it converts my special knowlege and labor into a form is independent and usable anywhere. I beleive the term is "fungible"

Answer 4

I personally enjoy the thrill in chechking the stock index.

Answer 5

You have 6 chickens. I have an iPod. You want my iPod. I want a TV. If you can somehow transform your 6 chickens into a TV, I'll sell you my iPod.

Answer 6

Not as long as the govt. is around, there will always be currency.
After all its the "Root of all Evil". We can't live without that.