Don't ask why I was searching for articles about barter, but in the course of my search I ran across this AP news article (link no longer available) from the beginning of June. The subject is the rise of bartering among consumers (and businesses) in a slow economy.
I found myself asking "why would an economic slowdown increase barter?" Generally, an advanced economy reverts to barter when the money used for commerce begins to fail in one of the three purposes: medium of exchange, store of value, measure of value. On the surface, the dollar doesn't appear to be failing these tests. It remains a well-accepted medium of exchange. Inflation, while higher by some measures than we've been used to recently, is not at the high rates one usually associates with a failed currency. Many would also say because inflation is not particularly high, the dollar retains its ability to measure value.
Feel free to argue those points. I'm setting up a straw man argument to knock down. For the purposes of this post, I'm going to argue that the issue is the opportunity cost of time. If business is slow, we have more time to seek alternate channels to move product. To the extent that we use the slow period to find someone who has what we want and wants what we have (double coincidence of wants is not always that common), barter may make sense. It allows us to move product and to satisfy wants. However, in better times, the benefit may not equal or surpass the cost of time.
Add to that, the fact that money is relatively "scarce" (to borrow a characteristic theme) in a slowdown, barter may offer some opportunities for trade that don't exist when our monetary income is constrained.
I look forward to your comments.