Forget your money -- bartering is in
| San Francisco
James McKenna has a deal for you. In exchange for your services as printer or perhaps a week at your vacation place in Florida, he'll swap you golf or karate lessons in Albany, N.Y. If it's a fine leather jacket you're interested in and you're ready to horse-trade something you have or can do well, see Jim Chaffee in Pharr, Texas.
Bartering has been around since Esau swapped his birthright for a bowl of lentils. Probably longer. But as the real value of cash continues to drop, this ancient form of cash continues to drop, this ancient form of commerce is booming across the United States. Trade clubs and new publications are sprouting up like suburbanites at a garage sale. A cashless sub-economy worth millions of dollars continues to grow, and that old spoilsport the taxman is poking around to make sure the government gets its cut.
"The essence of barter is a creative, problem-solving process where the participants can exchange value for value," says David London, a young Walnut Creek, Calif., entrepreneur who heads up the Comstock Trading Company, publishers of monthly and quarterly periodicals and a new book on bartering.
Barter (from the Old French "barater") cn mean to trick or cheat. But Mr. London (who has traded advertising space for everything from real estate to a Rototiller) insists that "unless there's mutual benefit, there's no trade.
"Unfortunately," he adds, "that concept gets lost with cash."
In any case, Americans by the thousands are formalizing their "propensity to truck, barter, and exchange," as Adam Smith put it. Joe Kessler, president of Trade Clubs in America, estimates that there are as many as 500 barter organizations in the US today, some highly sophisticated and computerized.
Some are merely classified listings of goods and services. Everything from Kodaks to Krugerrands, speed reading to survival instruction. There are 30 "learning exchanges" around the country, and the Chicago organization that started it all just a few years ago lists 20,000 experts in 3,000 different skills.
Some trade clubs deal in "credits" or "units," others even issue checkbooks, drafts, vouchers, or scrip. In these cases, a mini private economy evolves with its own form of currency. One problem here, some experts in barter point out, is that while a member is banking his credits for future use, inflation can do its dirty work.
Also, such formalization of barter invites greater scrutiny from the Internal Revenue Service, just the agency that swap aficionados (who tend to be libertarian souls, judging by the articles in their publications) are trying to avoid.
According to the IRS, "gross income includes all income you receive -- in the form of money, property, or services -- that is not, by law, expressly exempt from tax. . . ."
The IRS recently ruled that, for tax purposes, the value of each "trade unit" is one dollar.
But apparently there is considerable room for negotiation (if not haggling) with the tax collector over such fuzzy issues as "fair market value," "like kind ," and "mutual gifts." Particularly if trading is done between individuals and kept to relatively isolated instances not involving items or services of very large value, bartering can offer substantial tax advantages.
Plus, there's the satisfaction of "unlocking yourself as much as you can from the money system," as one barter expert puts it, gaining a little more control over one's economic life.
"It helps me quelch my anger at excessive taxation," grumbles Texas leather man Jim Chaffee, who's bartered new jackets for a roof repair on his factory. But Mr. Chaffee is also quite sure that bartering "will lead to a lot of cash business" among the 15,000 folks in Pharr.
Meanwhile, if you're interested in a well-used quarter-inch drill or a Honda motorcycle (new mufflers, needs a battery), just call me. I'm looking for a five-string banjo.