From Daredevil to Babycenter, bartering is alive and well

George Selgin’s recent excellent and extended blog post “The Myth of the Myth of Barter” responds to some recent academic debates over barter and provides some solid evidence in support of Adam Smith’s arguments that barter often becomes “clogged and embarrassed” when one needs services but is possessed of an excess of goods that are unwanted by the people who can provide the desired services.    In other words, Smith and Selgin both recognized that if I need my brick house repaired and I possess a surplus of strawberries, I’m in big trouble if the local mason is allergic to strawberries, grows his own, or just got six quarts of berries from another customer.The complications raised by barter are considered, by economists, to be part of the history of the evolution of money. Unlike strawberries, money doesn’t go bad after a few days. It’s universally exchangeable for (nearly) anything, and it’s easy to store. The clogs and embarrassments of the barter system are the spur for the evolution of the more efficient system that is money.So it matters a lot to economists like Selgin when people claim that barter economies never existed. And it matters even more when they use that claim to argue that the monetary system is unjust and evil because before money there were only “gift economies” where goods and services were provided like birthday presents. Gift economies are great, (Who doesn’t like presents?) but they only function among small groups with close associations and good knowledge of…Read More…

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