What is barter?

You give me a ton of bananas. I give you six computers. This is called barter. We exchange goods, but not money. It's a simple principle. Many people think barter is used in primitive societies, or perhaps in countries with a very weak currency. They don't think barter companies can be successful businesses.

But here are some surprising facts and figures. In the US there are more than 400 barter companies. Many were set up more than 30 years ago. Barter is a $6 million industry in the US. In the UK, barter companies are doing extremely good business. One of them, the Barter Company, began trading only three years ago. It now has eleven offices in the UK and Europe and manages barter business for 595 companies.

Why is barter increasing? Who needs barter, when you've got cash, at least not enough cash, and not at the right times. But they may have goods and services that they can't sell. They put these into a barter pool. The barter pool gives them exchange credit. With this credit they can 'buy' other goods and services from the pool.

So barter today is not the simple cross-trade of bananas for computers that we began with. In fact, you 'sell' your bananas to the pool, which contains office furniture, office equipment, clothing, printing, technology and so on. You can 'buy' from the pool what you need. Perhaps it's not surprising that the most traded items are accommodation and travel. Successful barter companies offer a big choice and are global and international. They are a safe investment for the twenty-first century.

Answer the questions:

1. Barter is used

a) only in countries with weak currency

b) only in primitive societies

c) in any business environment

2. Barter today is

a) a direct exchange of goods

b) buying and selling from a pool of goods

c) buying and selling for cash

3. Barter trade in the UK is

a) increasing

b) decreasing

c) staying at the same level

4. Who organizes barter trade today?

a) individual companies

b) specialized companies

c) governments.

Listening

Listen to a short story of the uses of, and alternatives to money. Decide which of the pictures of alternatives to money that are given below are mentioned. Answer the following questions:

1. When and where did they begin to use coins?

2. What were the first coins made of?

3. Has money been used only as a method of payment?

4. When did the use of paper money begin?

— Speaking

Discuss the following questions in your group:

1.What are the advantages and disadvantages of some of the alternatives to our idea of money mentioned in the listening exercise and of those shown in the pictures above?

2. What would be the consequence of a world without money? Would there be no poverty?

3. What are the advantages of using a bartering system?