I know what you are about to say. If you want to get something (material things) you need money. But you’d be surprised what you can get by swapping and bartering goods and services. Have a look at this story and find out that there are also ways when you don’t need money to get what you want.
Soda for Vodka
Summer 1959, Moscow. During an official meeting, the head of the Soviet Union, Nikita Khrushchev, drinks a famous soda. Yes! A member of the meeting discreetly welcomes it.
The happy man is a representative of a famous American brand of drinks (it is an easy guess which company I am referring to…). That evening, he has one goal: to convince the Russians to sell the American soda in their huge country.
But he shouts victory too early. If Khrushchev likes that soda, we are still in the times of the “cold war”, they don’t really want to consume a product from capitalist America!
But a few years later, when the relationship between the two countries improves, that soda brand tries again. And this time the Russians also see an interest in them because they can sell vodka to the Americans.
The deal can only be done without using the currency. Russia rejects the dollars of the American capitalists and cannot bring out the rubles from their country.
Then we return to the oldest form of exchange: bartering. The Russians authorize Americans to sell their drink on their soil in exchange for selling vodka on American soil.
This exchange for vodka has continued for years, but in 1979 the US no longer wants to exchange sodas for vodka.
So they find an alternative. Instead of regulating trade in vodka, the Russians would pay with their old warships. The American company thus resells the old scrap metal to make a good profit.
Swapping and Bartering Goods and Services
Do you know that there are Local Exchange Trading Systems (LETS) where you can trade not only things but also services?
In times of crisis, it would be good to start applying new economic models, like the sharing economy, where individuals can hire out things like their cars, homes and time to others in a peer-to-peer modality.
We have exchanged our home for vacation for many years through a website called Home Based Holidays, on the Web you can find many more. No worries about your belongings: people you don’t know come to you place, but you go to theirs!
Once, at a flea market I bought a sweater made by a famous French stylist for only 2 euros. I was astonished and the lady told me: I don’t like it any longer, but you do!
Actually the principle is very simple: instead of buying things that we maybe use only once, or we get tired of very soon, like children with their toys, we could start exchanging them.
It will be a step towards a more sustainable economy, that will bring us some benefits like reducing negative environmental impacts by decreasing the amount of goods needed to be produced, and cutting down on industry pollution. It will also increase recycling items and grant access to people who can’t afford buying certain types of goods or use them only from time to time.
All this is also in the perspective of the degrowth theory, that will let us go towards strengthening our belonging to our local community.
By the way, I have been using that sweater since then!
What do you think about it? Have you ever exchanged items with your friends? Would you like to do it, like when you were a child and you exchanged stickers?
My father, a minister, used to exchange pulpits with other ministers for a month during the summer. We visited Florida twice when I was growing up. (We lived in Virginia.) Later, after I was grown up, my father exchanged with a Canadian minister, who illustrated his sermons with Snoopy comics, which I found very enjoyable.
I will have to find some ways to barter. I have bought things at flea markets, and that was fun.
Great post! Love the stories about bartering with Russia! <3
Thank you Cheryl!
Could we try this with yard sales, but call them yard swaps? How about advertising that I need X, and I have A, B, and C to offer in exchange. Would that work?
I think it is a very good idea!
The ultimate problem with a barter system is that the IRS considers bartering goods and services to be the same as exchanging money for goods and services. Even if you think it is a break-even transaction, you’re still supposed to fill out paperwork. They want a Form 1099-B if it is going thru an exchange of some kind or on a 1099-MISC if it is private. A business is expected to report it on a Schedule C.
On a small scale you can usually get away with in because there’s no record. If it becomes organized, they start looking for ways to tax it. And then you need money because even if the barter is entirely non-cash, the IRS doesn’t take non-cash payments.
IRS hates bartering because it is so difficult to track.
https://www.irs.gov/taxtopics/tc420
Oh my God! Of course I was referring to a small scale exchange mainly among friends, or garage sales and flea market. However in Italy and also in Belgium there are websites where you can exchange your expertise, for instance, I may offer cooking classes in exchange of massage sessions. And it is not taxable, as no money is involved.
Once upon a time I was involved in a labor exchange. Each of us contributed what he had ability to do and in exchange could ask other members for their services. I was offering nude modeling, photography, and a strong back to help with physical tasks.
And then the IRS found out about it and there was a mad scramble to find out who gave what to whom and what fair market value was for the services, Monetarily everything i did was pretty trivial, so it didn’t impact me. The organization that ran it became so burdened with paperwork they simply stopped doing it.
This was 40 years ago.
If you keep it small and informal, you’re golden.
Good idea there, Crisbie! My dad was a sculptor, who for a time lived in his Ford camper van with two (wth?) Borzois whom he traded a sculpture for. He lived in that van with these two enormous hounds for 4 years, bartering and trading mostly art and I don’t even know what else, but it worked for him. Yes, he did take the dogs for a run every day, twice, but I cannot even imagine where his head was at then. Anyway, bartering and trading work better than you knew, eh?
I had an opportunity to buy some stuffs at a flea market in the UK and back then it was so much fun. I could get some great refurbished electronic products within my budget. Those memories were precious.
This makes me think of the “Craigslist garage” meaning rather than buying and keeping every tool you can think of (think consumerism, non minimalist living) you just get what you need from Craigslist. Not a perfect science but if I need a drill, I’ll buy a second hand drill from Craigslist and then sell it when I’m done. Rather than keep it in the closet with the rest of my tools, as they gather dust, I’m reinforcing my minimalist lifestyle and breaking my consumer habits. Enjoyed the read!
What an interesting post! I had no idea about the soda for vodka swap!
I’m part of the “Buy Nothing” group in Seattle. People can post what they no longer want and others can pick it up for free. It’s a great idea but something I haven’t been great at sticking to when pressed for time. Thank you for the inspiration and reasons to do better!