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What is Bartering?

Updated on February 26, 2011

Barter is the exchange of goods or services without the use of money. The earliest trade, before the invention of money, took the form of barter. Among non-literate peoples in many parts of the world, barter is still widely practiced; however, the use of money in the form of national currencies has everywhere tended to replace ancient barter customs.

Bartering chickens for an annual newspaper subscription.
Bartering chickens for an annual newspaper subscription.

Early Trading

Barter was the earliest basis for the development of markets, where the concept of "fair value" or "equivalent value" emerged even without a standardized medium of exchange. Such concepts as "value" and "price" generally developed in the process of bargaining or haggling, a way of arriving at a fair price by consensus. A man wishing to exchange a surplus of potatoes by barter must find someone who, first, needs his potatoes, and, second, has something to exchange that the seller needs. A man wishing to acquire potatoes must find someone who has potatoes to dispose of and wishes to acquire something the would-be buyer has available.

Then the two men must bargain to decide how many potatoes will be exchanged for the other commodity.

Anthropologists have found more examples of barter between tribes and communities than within such groups, This is most likely explained by the fact that internal exchanges often represent social and ceremonial gift-giving, whereas intergroup barter is a means of meeting economic needs. Tribal peoples, like nation-states, are seldom economically self-sufficient and must find ways of complementing what they themselves are able to produce.

Silent Trade

The most striking type of barter is the so-called "silent trade," in which no direct contact occurs between the parties to the exchange. One group leaves trade items at a designated place. Members of the second group come later and if they Rnd the items desirable, leave goods of their own in place of those they take. Such barter has occurred between groups that have hostile relations or no relations at all with each other, and between people of mutually unintelligible languages.

Examples of silent trade were reported by ancient and medieval historians such as Herodotus and Ibn Battuta. Modern anthropologists have observed silent trade among tribes of California Indians, Pygmies and Bantus in the Congo, natives of New Guinea, and others. These examples show how the need to trade overrides what might appear to be insurmountable difficulties.

Trading Chains

Inter-tribal trade frequently involves the development of trade partnerships, some of which form chains passing through many groups and across hundreds of miles. Examples of this sort of barter have been found among Australian tribes in modern times: stone axes from southern sources are known to have been distributed in this manner to northern tribes.

Such trading chains probably also explain why such items as barracuda jaws from the Gulf of Mexico and mica from the Rocky Mountains are found among the archaeological remains of the prehistoric Hopewell peoples of Ohio.

Even in industrialized societies, some bartering still goes on. In the United States, for example, "swapping" through the medium of newspaper columns is barter in pure form.

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