Is bartering trade a step in the right direction?
As recent economic meltdowns show, our existing monetary plans don’t always cut the mustard. Our Future Planet looks at alternatives.
In recent years there have been unprecedented examples of how today’s financial systems aren’t necessarily working. The global financial banking crisis, which seems only yesterday but for which the true impacts on global citizens are yet to kick in, is one of these.
The tax legacy inherited by ordinary people, forced to stump up billions to protect bankers concerned with leveraging cash into hugely profitable housing markets and mortgage agreements will last for years. This is one of the key problems with how money and today’s trading systems exacerbate inequitable wealth sharing.
Even more ironically, this tax legacy is more likely to impact on those least able to afford it, given rising inequalities between high and low earners. A recent report, An Anatomy of Economic Inequality in the UK, highlights why systems aren’t distributing wealth fairly.
‘The independent National Equality Panel, in its report entitled An Anatomy of Economic Inequality in the UK, argues that policy interventions are needed at each life cycle stage to counter the way economic inequalities are reinforced over people’s lives and often on to the next generation,’ explains the University of Bristol. Its Professor Tariq Modood, director of the University’s Centre for the Study of Ethnicity and Citizenship, finds that:
“Differences in wealth are associated, for instance, with opportunities such as the ability to buy houses in the catchment areas of the best schools, to afford private education, or to help children onto the housing ladder. At the other end of life, wealth levels are associated with stark differences in life expectancy after 50.”
This proves just how impactful the way we value our skills and services is. Is a City trader necessarily worth millions, whilst a nurse, doctor, or perhaps yet more tellingly a community volunteer in a poor neighbourhood can earn fractions of the same gross, or even nothing at all for rendering their valuable services?
“A tenth of households aged 55-64 have wealth of under £28,000, but a tenth have over £1.3 million (including houses and pension rights).” says Modood. “At that age, just before retirement, half of higher professional and managerial household have wealth of over £900,000, but half of households with routine jobs have less than £150,000.”
Existing trading and monetary concepts fail to grasp how this imbalance impacts on all levels of sustainability within a global society. And we can extend the same logic to things like Gross Domestic Product (GDP) and how all of this works in the international arena.
International inequality
Whilst elements like GDP remain the only way to value and judge economies, so the unsustainable global systems of exchange will continue. Another key point is that GDP has nothing to do with where money comes from and goes, and where goods and services are actually required.
It also completely fails to recognise the value of natural ecosystems financially, creating no incentive for the preservation of resources based on non monetary criteria.
For example, President Yoweri Museveni has this month invited investors to come and invest in East Africa, speaking after officially opening the 3rd East African Community Investment Conference at Speke Resort Munyonyo in Kampala.
“In the next 5 years Uganda should be able to generate 3,800 megawatts and in 15 years, 17,000 mwts of electricity will be available in Uganda, the level of Malaysia today,” he said.
‘He therefore called on partners of Africa to help in rebuilding the infrastructure and remove the bottle necks that keep the population in poverty. He said that there was a rapid growth of the economy in the East African states at the rate of 7 per cent GDP but noted that Uganda would have been at 13 per cent.’
But if such GDP is primarily made from foreign export at cheap prices, or from breaking down Western recycling in harmful processing plants, is that actually improving the economy and people’s lives, or merely raising a figure that might enable more international loan making?
According to index mundi, Uganda’s GDP, composition by sector, looks like: agriculture: 22.2 per cent, industry: 25.1 per cent, services: 52.8 per cent (2009 est.).
There are other inequalities created by international finance. Museveni ‘gave as an example the discrepancies of electricity tariffs between Uganda and China, saying in Uganda a unit of electricity costs 15 American cents yet in China it is only 3 American cents.
‘He added that in Uganda the Cost of Internal Freight is 12 American cents per one kilometer tonne, while in China it is between one and two American cents per kilometer tonne’
‘How can Medium Development Goals (MDGs) come about if you cannot encourage low cost of doing business,” he asked.’ Many of these elements might be improved, if not solved, by altering how we value things.
Bartering business
Some people suggest returning to more historical barter systems, where goods and services are exchanged like for like, rather than on inflated or biased monetary ‘valuations’, might be the way forward.
But Republican Senate candidate Sue Lowden recently attracted derision for suggesting the system might work as an alternative to recent health legislation proposed in the US.
‘The truth of the matter is there is bartering going on in this state and in the country,” The Huffington Post quotes her as saying. “It has been going on for years and it was a casual statement talking about the reality of what's going on, and not in a negative way by the way.’
‘This is something, you know when I talk about bartering like you said it’s also bargaining for the price, asking doctors if there’s a different price if you’re paying cash or paying by check. We know this is going on.’
Then again The Republican American points to a local Tattoo and Body Piercing shop in Waterbury, where the owner is actively encouraging trading his business services for other business items, or for toys for his son.
Many networks exist, including Barter Systems Incorporated, or the Canadian Barter System. These companies claim their systems ease trade, and make it far simpler to create and maintain a customer base.
‘The carpenter comes to you as a new customer, wanting to plan a trip to Greece. As a travel agent, you barter to get computer maintenance work done at your office. The owner of the sailboat hires a carpenter to do some touch-up work on his fleet.’
‘The computer professional uses his trade dollars to rent a sailboat for a vacation. The infrastructure allows our members to barter for products and services anytime, any place, and for any amount with respect to their available barter credit.’ suggests Canadian Barter System.
What’s much more challenging though is to imagine how any global consensus could ever be reached on such a system. Leaders were virtually paralysed by dispute at the Copenhagen Conference, and this was over issues backed by mass global scientific agreement.
It’s hard to see how leaders could ever generate movement in today’s political climate. But something needs to be done.
In February, the EU ‘adopted a series of recommendations to ensure that the budget deficit of Greece is brought below 3 per cent of GDP by 2012, that the government timely implements a reform programme to restore the competitiveness of its economy and generally runs policies that take account of its long term interest and the general interest of the euro area and of the European Union as a whole.’
This is another example of where things are going wrong. ‘The European Commission is making solid and rapid progress with the ECB, the IMF and the Greek authorities to finalise the Greek adjustment programme. The Commission expects this work to be finalised in the coming days.’ said President Barroso on April 28, amid clamouring for Greece to be removed from EU trading systems
Whatever the solution is, we seem a long way from anything that might be called an equitable way of thinking, trading, and valuing one another.
What are your views? Not sure? Read the resources below for more information. Add your comment below. We welcome your thoughts and proposals. Not a Planetary Citizen? Sign up to Our Future Planet today!
Resources:
IIED: Sustaining Local Food Systems, Agricultural Biodiversity and Livelihoods - Barter Markets: Sustaining people and nature in the Andes
BARTERING FOR A BETTER FUTURE? COMMUNITY CURRENCIES AND SUSTAINABLE CONSUMPTION
World Economic Situation and Prospects 2010 - Global outlook
