Virtually anything that can be sold can also be bartered. And guess what? A complex infrastructure exists, in Sacramento and across the country, to promote this invisible economy.
When Herb Miller was growing up in Elk Grove in the 1960s, he had an uncle who roamed the world mining for hard rocks and precious metals: gemstones, gold, platinum. To save his cash income, he would barter for mining equipment. “It taught me at a young age,” says Miller, “you don’t have to pay cash for things.”
For more than 30 years, Miller, now an Auburn-based jeweler and watchmaker, has used barter as a core part of his business and income model. He began by trading jewelry for needed dental work, moved to larger-scale trades around advertising and other necessary business projects, and eventually expanded his barter networks to incorporate a large part of his personal expenditures, too. In an average year, he calculates, he now does $25,000 to $50,000 of barter business.
“Some people do it just to go out to dinner,” Miller explains. “But if you’re using it the right way, it does enhance your business and gives you a bigger customer base. Any time the economy is like this, more and more people will barter. Because they’re sitting on inventory; people aren’t buying.”
During these economic dog days, millions of Americans have begun bartering their goods, their services, their time. Earlier this year, The New York Times reported that more than 200,000 barter-related ads were being placed on Craigslist every day, a 100 percent jump since 2008.
In the same way Russians began to use barter to secure produce they could no longer afford in the wake of the Soviet Union’s demise and Argentines flocked to hundreds of newly created barter clubs following that country’s fiscal collapse in 2001, so in recent years Americans have increasingly looked to barter.
In Sacramento and across the country, there are now barter clubs, online trading sites, barter zines. In short, a complex barter infrastructure now exists to facilitate trade amongst people and companies short on cash but still needing and wanting to access markets. That infrastructure existed prior to the economic implosion of recent years, but the great collapse has dramatically fueled its expansion.
While barter used to be seen as somehow countercultural, a rejection of the great impersonal forces of market capitalism, these days, in the same way pot has become mainstream, so has barter. It’s no longer a symbol of anything countercultural; instead, increasingly, it’s a part of the regular business landscape, a way for businesses large and small to find ways to dispose of excess inventory or to take advantage of excess time. The Internal Revenue Service considers barter revenues to be taxable—there is a special form, the 1099-B, which businesses must fill in to declare their barter income—and barter business purchases to be deductible. Barter bank accounts are now considered a part of a person’s estate, transferable on death to the estate’s heirs.
Sacramentans Clif and Amy Edwards are living proof.
Clif runs a graphic-design business, working on magazine covers, restaurant menus and local billboards; his wife does astrology readings for parents looking for help in understanding their children’s behavior. Both are members of a local barter club.
“There’s two reasons to barter,” explains Clif. “One is for the [material] gains, and the other is for an ideology.” Barterers, he says, tend to be looking for community, wanting their business transactions to build that community rather than simply add to bank balances. They tend to be looking for camaraderie in trade.
While many businesses have seen barter soar during the recession, for Clif, the downtimes haven’t resulted in more barter—after all, he says, graphic design is a front-line business, particularly sensitive to upticks and to downturns in the economy. During the good times, businesses advertise more, splurge on new logos and so on. During the down times, they hold off—and that’s true to a degree whether they’re paying cash or simply bartering for services. But, absent barter, it’s likely things would have been even worse for him.
Now, though, Clif is starting to get more optimistic: There are signs the economy’s coming back to life. “It feels like everything’s flowing again. The ice block has gone.” He’s getting more cash clients, and he’s also getting more requests to barter. “Suddenly, the barter picked up,” he says. “So I do think the barter is going by the same rules.” Businesses putting out feelers regarding increased spending might still be reluctant in the short term to part with carefully saved cash; but, as the economic deep freeze starts to thaw, Clif has found them slightly more willing to trade services and product for his expertise.