Barter is a system of exchange where goods and services are traded directly between to parties without the use of any medium of exchange such as money. It can be differentiated for a gift economy by the fact that transactions are normally immediate and do not give rise to any future obligations. Barter has tended to involve a two way bilateral exchange of goods but can also take the form of a multi-party exchange or mulit-lateral barter. The term is mostly used for business-to-business (b2b) currencies.
Barter exchange, bilateral and multi-laterel, is visible in most countries at a low level in parallel to the established money system but can become more prevalent during currency shocks where money can become unstable (hyperinflation or spiralling deflation) or just unavailable.
Orthodox economics has used the inconvenience and inefficiency of barter to explain the emergence of system of money in the ancient world. However anthropologist David Graeber has established that ‘No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.’ 1
According to the International Reciprocal Trade Association, the barter industry trade body, more than 450,000 businesses transacted $10 billion globally in 2008 – and officials expected trade volume to continue to grow 2.