The History of Bartering | Bob Klein of Medici Capital

The History of Bartering

The rise of the internet and the ease of mailing items around the world has led to a renewed interest in bartering. However, bartering is nothing new and was used by most ancient cultures as the basis for their economic systems. So what exactly is bartering and how did it get its start?

At its core, bartering is simply trading an item that you have to someone else for an item that they have. This system allows people to get their hands on objects and even services that they need or want without having to worry about money. Bartering was used by most ancient cultures before money was even invented and allowed a thriving global market to exist in the pre-currency era.

One of the earliest recorded uses of bartering can be traced back to around 6,000 BC. Phoenician traders established sea trade routes that spanned many cities along the Mediterranean Sea. They would barter agricultural products and goods such as papyrus, textiles, metals and spices for each other along their trade routes, bringing back home ships full of treasures from far-away lands that they could then barter at home for items they wanted.

Babylonians adopted and perfected the Phoenician system of bartering and it then spread across the Middle East and Europe. Even after money was developed, bartering was still a common way for traders to acquire goods from cultures who didn’t use the same currency as them. During the Colonial Era, American traders would often barter weapons and metal tools to Native Americans for furs and food.

The use of bartering as an economic tool has gone up and down throughout history, but it has never disappeared. The incidences of bartering seem to go up whenever there is a nation is going through a period of economic instability. When money was debased by the US government during the 1920’s, during the bust it became scarce during the time of the Great Depression in the 1930s, incidences of bartering rose as a way for people to obtain food and services they needed. Likewise in modern times, the economic crisis in Bolivarian Venezuela has led to most people having to resort to bartering in order to get the most basic commodities due to the hyperinflation in that country.  Thus, when money is manipulated or destroyed in value by governments, citizens must resort to barter, as the money becomes either unusable or very hard to use.

Bartering can also be a fun way for people to learn more about the economy and the market while getting their hands on some unique treasures and clearing out some of their own items. Since governments are still managing the monetary systems in poor fashion, bartering will resurface, when the money cannot perform its necessary function.