Before the Spanish conquest of the Americas, many pre-Columbian civilizations were organized economically on the basis of barter. If a family harvested a certain type of food, they traded it with another clan that had a different kind, or perhaps swapped it for lands, cattle, or garments. Today, in the midst of a dramatic economic crisis in Latin America, that wise approach has apparently revived.
In Argentina, more than 50 percent of the population is poor, and unemployment is above 40 percent. Barter clubs began to appear in 1995, but expanded enormously two years ago during a social and economic crisis, at about the same time that President Fernado de la Ra was ousted from power following a massive popular uprising. According to a study by Centro de Estudios Nueva Mayor’a, more than 6 million people were part of the barter economy in 2001. Barter has also encouraged many people to become small entrepreneurs, developing production systems by exploiting their best skills.
Barter Clubs are organized in “nodes” or meeting points, and participants attend once or twice a week. Members introduce their products or services and the range is large, everything from homemade food, clothes, and building or plumbing services to language or marketing classes, body massages, Web page building, or computer repair. Almost anything you can buy with money can be acquired here without spending a centavo.
In 2001, 5000 nodes were operating across the country. However, less than 1000 have survived, since the massive number of people joining the system caused an asymmetry between supply and demand.
Reconstructing Lives
Psychologist Ana L-pez had a life similar to that of most middle-class Argentinean women until four years ago. She worked for a human resources company, and her husband ran a small factory. Their incomes provided enough to live a comfortable life, go on vacation, and send their daughters to a good private school.
Then recession knocked on their door. Ana was fired, they were forced to sell the factory, and their savings disappeared. “We depended on our relatives to feed our daughters,” says Ana, “until I came to a barter club to offer my professional services. Six months later, I already had five patients, and I organized a vocational guidance workshop. Julio, Ana’s husband, started to prepare natural foods to offer at the network. Little by little, he attracted a substantial number of customers. “We reconstructed our life from our undertakings,” he explains.
Next, the couple took responsibility for coordinating a new node. They currently teach those who join the network how best to offer their wares. “If the unemployment rate went down and we got jobs within the formal economic system, we would operate with money again, because not everything can be paid through this system, and nowadays you can buy less than two years ago with credits,” Ana explains. “However, I would not abandon my bartering activity, because it is not only an economic exchange system, but rather a way to look at your life; it is a way of organizing civil society when faced by the inaction of political leaders. It is a way of respecting decent jobs, and growing as people and as a community.”
Beyond Capitalism
People who participate in the barter system are called “prosumers,” referring to those who produce and consume what is offered in the network. The theoretical basis was developed by economist Silvio Gesell, who postulated that poverty is related to the role of money as a means of exchange and accumulation of power.
Inside the network, the means of exchange is credit. Each person who enters the system receives some, and must assign a value to their own services or products. For example, with eight credits you can buy a dozen small meat pies, with 16 you can pay for an art or language class. Respect for ecological principles is common to all barter activities. The use of materials that pollute the environment is avoided as much as possible.
In the last year, the range of available goods and services has increased enormously. For example, the network includes prepaid medical health companies, dentists, and lawyers. It is possible to get secondhand cars, as well as items for small and middle size companies. You can even arrange a vacation, including hotel costs.
Gym teacher Carlos Laur’a has been bartering for two years: “I am working as a teacher at a state school,” he says, “but that salary is hardly enough to live on. With the students I receive through the network, I obtain an additional income, with which I can pay for painting classes or fix my computer. I cannot live on bartering, but undoubtedly it helps me have a better life quality.”
Helo’sa Primavera is an economist, sociologist, and the founder of Red de Trueque Solidario (Support Barter Network), one of the big networks in Argentina, Brazil, Chile, Uruguay, Colombia, and El Salvador. She explains that “wealth is not directly related to money, which is a scarce good, but rather to the ability people have to produce or to teach.”
According to Primavera, there are three types of participants: “There is a group of people who came to the system as their last resort. We may say that for these people barter works as a kind of Ôsecond-class capitalism,’ and that they are abandoning the network because the economy is improving. Another group regards barter as a way to
perfect capitalism. It imitates the practices of the establishment, although it uses the exchange method. Finally, there is a group that regards barter as a system of solidarity that exceeds capitalism; I include myself in the latter group.”
The strength of this informal economy has been so powerful that in some districts, local authorities collect part of taxes in barter credits. Town councils have used them to support employment programs and promote social services for the jobless.
In a country where financial credit has virtually disappeared, barter has become a way out. Housewives obtain income through their cooking. Small clothing and shoe manufacturers find clients. Health professionals meet with patients, and radio stations have started asking their advertisers to pay with credits. Some pay salaries and obtain supplies with the same system.
In short, a collective alternative that has grown from necessity, one that stresses creativity, intelligence, and solidarity, has begun to cover a growing social deficit. Barter helps to boost social welfare, encourage work, promote a fair distribution of wealth, and stimulate the enriching contribution of groups working on a common project.
Challenging economic gurus, not to mention the clumsy and destructive recipes of the International Monetary Fund, barter is fast emerging as more than an emergency exit. For Argentina and other countries, it could be the seed from which a viable alternative economy can grow.
Elizabeth L. Sad is a journalist based in Buenos Aires, Argentina. This article was translated by David Epstein.