Barter is the exchange of one service or commodity for another without exchanging MONEY. Barter was used by primitive peoples and is still practiced in some parts of the world. A barter economy requires a “coincidence of needs” - that is, a person having something to trade must find another who wants it and has something acceptable to offer in exchange. In a money economy, the owner of a commodity may sell it for money, which is acceptable in payment for goods, thus avoiding the time and effort that would be required to find someone who could make an acceptable trade. The money economy is considered the keystone of modern economic life. Barter is still active, not only in countries with chronically weak currencies but also in western countries like the United States, where it made something of comeback with the onset of the INTERNET. Another reason for its revival is that barter can be attractive for smaller businesses to save money. For example, a painting contractor could paint the exterior of an auto body shop in exchange for car repairs. Success in bartering requires finding an agreeable trading partner. Participants must agree on a fair value of the products or services that are being traded. It is best to put all bartering agreements in writing to avoid “he said, she said” kinds of problems. Bartering has become so accepted that even federal and state tax collectors recognize its value. Barter-system deals are included in taxes dollar for dollar, as if the two participants were simply exchanging checks for the amount of their trade. The Internet has opened a vast array of bartering opportunities. Some sites for consumers to view are MrSwap.com, WebSwap.com, Switchouse.com, and SwapVillage.com.
See also COUNTERTRADE.