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Cashless Economies on the Rise

  • Andrea Shea

An ancient form of exchange is making a comeback in the United States during this economic downturn. People and small businesses are bartering services and stuff: piano lessons, plumbing, accounting, furniture, even fresh vegetables!

Valerie Gates, for example, will work for food. Standing in her kitchen, the marketing expert - who doesn't do much cooking - reaps the harvest of a barter system she devised five months ago. Boston-area farmer Jake Ferreira has brought her a cooler packed with fresh, prepared meals, along with baby arugula, pesto, asparagus with spring garlic, and homemade cheese.

Gates fashioned a logo for Ferreira's fledgling company, Beetlebung Farm LLC. He and his business partner help people and schools plan and manage vegetable gardens. They also run a food catering company using local ingredients.

Gates usually charges a significant hourly rate for her marketing know-how, much more than some small businesses can afford. As an alternative, she started the Will Work for Food Project.

"I wanted to find a way to offer my services to farms, and I realized that farms usually don't have money set aside for a marketing budget, but they do have produce!" she explains.

She now gives marketing advice to 15 New England farms in exchange for homegrown goods for her family.

Swapping services

It was a good move for Ferreira and his business partner, too.

"We were looking for tools that could better establish our brand, and, in turn, she wanted to learn more about food and locally grown produce and the ability to cook."

While bartering is new to Gates, Jake Ferreira is familiar with this age-old concept.

"In a down economy," he observes, "it makes sense to return to certain traditions that can work out well, where people can trade for like items. For us in the agriculture field, it's very easy for us to barter. It's not quite an apple for an apple, but maybe it's chives for onions," he says with a laugh.

No insurance? No problem

For others, like Scott Cahaly, a trade could be a painting for, say, dental work.

The 24-year-old artist doesn't have dental insurance. Sales have been slow, and his studio is packed with canvases and stone sculptures. So Cahaly joined Barter Connections, a company that acts as a bartering middleman.

"I need to get a crown for a back tooth, so I dropped off a painting, and I have to set up an appointment with the dentist. I should probably do it before my tooth falls out!"

Why buy when you can barter?

For some people, bartering is a very comfortable way of life. Twenty-seven-year old photographer Kelly MacDonald says everything in her apartment is bartered for, even her plants. Her currency is wedding and family portrait packages.

MacDonald began bartering three years ago. She has plenty of paid jobs, but says swapping - not shopping - makes sense.

"It's a lot more responsible for me, especially now in this economy, because I'm saving my money. Everything that comes in just gets put in the bank."

MacDonald arranges her trades online, using the advertising site Craigslist, and she's not alone. Over the past 12 months, traffic in the site's bartering category jumped 100 percent nationwide, 50 percent in Boston.

Trade thrives in tough times

Jim Hoopes, professor of business ethics at Babson College, says bartering flourishes when cash is hard to get. He points to the Great Depression as an example. In 1933, President Roosevelt shut down the country's banks for a full week. Money was scarce. As a result, a barter economy sprang up. Rural department stores accepted sheep for dresses, for example. But it was a temporary fix.

Hoopes explains that bartering is inefficient in an economy that's built on speed.

"It's a quaint, charming practice and it's fun to see and it reflects individual initiative, [but] as social policy, it's not something we want to encourage."

Because, he says, it's not a sign of a healthy economy. Cold, hard cash is, because it's a common medium of exchange. You can spend it anywhere, on anything.

But you can only take in so many sheep. Or big bags of salad greens.

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