In Distressed Economy, Spaniards Are Trading Traditional Commerce for Bartering
Bartering, that old process of swapping stuff with other people in an ad hoc way based on who needs what, is actually been having a bit of a moment in troubled Spain, reports the Wall Street Journal:
As Europe's leaders struggle with a five-year-old economic crunch that has saddled Spain with the industrialized world's highest jobless rate, young Spaniards are increasingly embracing such bottom-up self-help initiatives to cope. The diverse measures—some commonly associated with rural or disaster-zone economies—supplement a public safety net that is fraying under government austerity programs.
When you don't have any cash, trading an hour of moving boxes for a lift to your relatives' place is pretty attractive. The time-trading and bartering systems have brought people closer together, say those involved. And some of the arrangements—an hour of housekeeping can apparently be traded for an hour of legal services—are unfathomable to Americans now accustomed to hearing the word "socialism" used to describe raising taxes on the rich.
There's a long-term problem, says a professor quoted in the Journal piece:
Banks and social currencies, he says, can backfire on the broader economy since the income received from such arrangements often goes undeclared, therefore depriving the government of tax revenue. Social currencies and time banks also preclude taking on debt, adds Mr. García Montalvo, which in moderate levels can help people start businesses and access beneficial goods and services that they can't afford upfront.
Reuters wrote back in February that Spanish barter markets have been on the rise for years.
Bartering in the United States is subject to taxation, of course: "You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide." (Spain, too.) But enforcement is hard because bartering is generally extremely informal, and who's walking around with a ledger, recording all their deals? The top tips from the Barter Kings themselves don't even include the word "tax."
Remember the guy who traded a red paper clip for something and then that something for another something and on and on and then ended up with a house in Saskatchewan? He donated that house to the town it's located in. I guess what he really bartered for was a book deal.
Photo of the La Boqueria from Wikimedia Commons