BarterAuthor(s): George DaltonReviewed work(s):Source: Journal of Economic Issues, Vol. 16, No. 1 (Mar., 1982), pp. 181-190Published by: Association for Evolutionary EconomicsStable URL: http://www.jstor.org/stable/4225147 .Accessed: 14/10/2012 18:13

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JO URNA L OF ECONOMIC ISSUES J Vol. XVI No. I Marcli 1982

Barter

George Dalton

What barter means exactly, how important it has been in the past, whether it exists anywhere in present-day economic systems, under what circumstances barter transactions arise in different sorts of economies; in short, any question of historical, anthropological, or current interest touching barter cannot be answered clearly until three ingrained, tena- cious, and related ambiguities are explained.

First, in English we use the treacherous term barter to mean two very different kinds of transactions: moneyless market exchange (market ex- change in kind), and moneyless exchange of any sort (gift-giving, presta- tions, ceremonial exchanges such as potlatch, kula, and moka). To avoid ambiguity, it is essential to confine the meaning of barter to moneyless market exchanges. To call any sort of moneyless exchange barter is to con- fuse by lumping together very different sorts of transactions. Like market exchanges carried out with money, market exchanges in kind (barter) are also purchase or sale transactions. The goods exchanged and the terms of trade are of central importance, rather than the relationship between the parties exchanging. In barter transactions, each side wants the specific goods the other side offers, the persons exchanging goods may be total strangers to one another, and the terms of trade are determined by familiar supply and demand forces, both parties to the transaction seeking to econ- omize or maximize, to receive the most for what they pay.

In our capitalist society, reciprocal moneyless exchanges which are not

The author holds a joint appointment as Professor in the Departments of Eco- nomics and Anthropology, Northwestern University, Evanston, Illinois.

181

182 George Dalton/

barter (not market exchanges) are of sociological rather than economic interest: gift exchange between kin and friends at Christmas, birthdays, anniversaries, and weddings are not related to the structure of production (land, labor, and tools are not allocated to production units by gift-giving, but by market purchase). Indeed, the giver of gifts at our ceremonial oc- casions usually first buys on the market the presents to be given. Such reciprocal gift-giving is a material expression of an enduring social rela- tionship. Exchanging Christmas gifts celebrates kinship and friendship.

Anthropologists now use the term reciprocity in a technical sense to characterize such gift-giving and to separate it as a distinct mode of trans- action, different from market exchange: Reciprocity is obligatory gift- giving induced by a social relationship. The word prestation is frequently used to characterize such obligatory gift-giving [31; 12].

Archaeologists, social anthropologists, and historians have long been interested in the economic organization of pre-colonial, pre-industrial, and pre-capitalist societies, which they variously call hunting and gather- ing bands, tribes, peasantries, and early kingdoms. Professional research in what is now called economic anthropology and economic archaeology has intensified in the last twenty years, as has research into the early eco- nomic history of Japan, China, and Third World areas such as Africa [9; 40; 15; 30; 18]. Much valuable work is in print about reciprocity, a mode of transaction much more important in aboriginal (pre-colonial) stateless societies (Highland New Guinea, Australian aborigines) than in our own [35; 42; 39; 10; 25]. In short, moneyless exchanges and pay- ments which are not barter are now very well documented and much bet- ter understood than they were fifty years ago, when N. S. B. Gras wrote an article on barter for the Enicyclopaedia of the Social Sciences [19].

Second, another ambiguity obstructing our understanding of barter is due to conjectural history, to spurious evolutionary guessing about what may have plausibly preceded the use of cash (coinage) for market trans- actions, a "hypothetical explanation of the origins of money" [19]. Con- jectural history about barter transactions is invented in order to point up the usefulness of money by showing how difficult it would be to carry out market transactions without money, an explanation that goes back to Aris- totle [23]. It is assumed (without evidence) that in the beginning there were ordinary and familiar market transactions without money (barter). A man who made clay pots and wanted to exchange them for potatoes had the onerous task of finding just that person who had potatoes and wanted to exchange them for pots-no other would do. An owner of potatoes who did not want pots, or an owner of chicken who wanted pots, by assump- tion could not make a mutually satisfactory exchange with the owner of

Barter 183

pots who wanted potatoes. Then money is introduced, and all becomes simple for the hypothetical owner of pots or of anything else who wants to exchange. Our potter sells his pots to anyone with money and buys the potatoes with money from anyone having potatoes to sell. By pricing dif- ferent goods in the same money, they all become commensurable (directly comparable in price) as well as exchangeable for the same money.

There is no question that when many different goods become priced in money, market exchanges become enormously facilitated to the advan- tage of buyers and sellers. What is wrong with the example is to postulate as ever having actually existed in real world economies of time and place a situation of widespread barter; that market exchanges ever were fre- quent, quantitatively important, or transacted an appreciable range of nat- ural resources, labor, goods, or services before money came into use; that important market sectors existed before money existed.

Third, the conceptual ambiguity obstructing our understanding of bar- ter that is the most difficult to clarify involves the arcane topic of "primi- tive money," about which deep disagreement persists. Happily, recent re- search is also of help here [21; 22; 23; 34; 7; 10].

For the sake of clarity, let us use the word cash for coinage, paper cur- rency, and demand deposits such as dollars, francs, and British sterling and their historical antecedents going back to the coinage of medieval Europe and the Roman Empire [22; 23]. Note that cash is invariably asso- ciated with state systems, that is, with central government [14]. Many of the objects called primitive money or primitive valuables (pigs and pearl shells in Highland New Guinea, for example) were employed in stateless societies, a matter of some importance in understanding their peculiar po- litical and social usages [10; 42; 41].

Anthropologists, archaeologists, and historians have reported thou- sands of decorative and useful objects-from shark's teeth and wood- pecker scalps to cows-serving as special means of commercial or non- commercial payment or exchange in primitive, peasant, and archaic so- cieties all over the world [16; 37]. It has not been easy to decide whether such objects perform "monetary" uses because there are important differ- ences as well as similarities between them and cash. They have puzzled investigators for several reasons.

The great variety of objects, together with the many different indi- vidual and group transactions and ceremonies they enter, rules out any simple or general interpretation. Demonstrably, most were not crude proxies for dollars or francs in simple market transactions. In several documented instances, new valuable objects were introduced by European or Arab traders, as were cowrie shells and brass rods in Africa; or indig-

184 George Dalton

enous objects were counterfeited, as were wampum shells manufactured by Europeans for trading with Indians in the eastern United States [41; 44; 46]. It is difficult to disentangle aboriginal valuables from those intro- duced from outside because much of the literature describes situations after European contact or colonial presence, when the usage of indigenous valuables was already seriously influenced by European cash, trade, or colonial rule [13; 3; 4].

There are at least two quite different kinds of objects called primitive money. One kind does enter ordinary commercial exchanges, usually marketplace transactions of a petty sort. This primitive money-stuff does act as a crude proxy for francs or dollars, much as cigarettes were used as currency in the petty exchanges in prisoner of war camps during the Second World War and pounds of tobacco as a medium of commercial exchange in colonial America [37]. Such objects should be called primi- tive money (or commodity money) because, like our own cash, they are uniform in appearance, portable, and divisible (bars of salt, twists of wire); above all, because they are used to facilitate ordinary purchase and sale transactions in market exchange.

It is the second sort which has been more difficult to understand because the objects themselves and the political and social transactions for which they are used (bridewealth, death compensation) have no close counter- parts in modern societies: pig tusks and large stones in the Pacific islands, copper shields in the potlatches of the Kwakiutl Indians of the American Northwest, cows for bridewealth payments in East Africa, and shell brace- lets and necklaces in long-distance kula exchanges on islands off the east coast of New Guinea. These have a slight resemblance to wedding rings, military medals, crown jewels, sports trophies, and heirlooms in western societies, as Bronislaw Malinowski pointed out sixty years ago [28; 29].

I prefer to call this subset of items primitive valuables rather than primitive money, because they are peculiarly social and political rather than economic, their main usages having nothing to do with market ex- change. Some are like wedding rings, emotive symbols publicly signifying the change in social status that marriage represents (but paying bride- wealth, unlike wedding rings, is necessary to legalize marriage and to affiliate children of the marriage in the socially approved manner). Others are something like military medals and sports trophies, meant to confer distinction on men for their outstanding achievement and public recogni- tion of their prowess. To acquire them as war booty or in ceremonial ex- change is to acquire honor, reputation, and the favor of the gods and of clients and retainers. Still others are like crown jewels, pieces of the True Cross, and family heirlooms: revered symbols of group cohesion and iden-

Barter 185

tity, having emotive histories, names, and pedigrees associated with mem- orable events, common origins, and heroic ancestors. These rarely if ever change hands in payment transactions.

Those indigenous valuables which were transactionable entered a nar- row range of social and political events associated with birth, puberty, marriage, death, warfare, dispute settlement, individual and group rela- tions of alliance and hostility, and leadership or big-man status in state- less societies [10]. There are no words in English enabling us to label the usage of such objects precisely: They have been called social money, special-purpose money, non-commercial money, valuables reserved for status purposes, and rationing devices controlling access to status posi- tions. It is far better, I believe, to avoid entirely calling this subset of val- uables "money" or "currency" of any sort, because the familiar word money is so inextricably associated with ordinary commercial or market purchases. The primitive objects are regarded as valuables to be used in special ways only; they are necessary means of reciprocal payment in so- cial and political transactions. They are used to create social relationships (marriage), prevent group hostility and warfare (bloodwealth payments), elevate one's political position (potlatch, moka), and restore peaceful social relationships between persons and groups disrupted by conflict (compensation for adultery, payments to allies who have lost men on our behalf in warfare).

We can now spell out what barter is and is not, whether it has ever been an important mode of transaction, and the circumstances under which bar- ter transactions occur.

1. Barter, in the strict sense of moneyless market exchange, has never been a quantitatively important or dominant model of transaction in any past or present economic system about which we have hard information.

2. As a minor, infrequent, petty, or emergency transaction, barter occurs widely in past and present economies. Barter transactions are com- patible with any sort of economic system, from the primitive economy of the Trobriand Islands, where barter is called gimwali [28; 29], to devel- oped capitalist and communist economies today. Just as cash payments in marketplace transactions occur in the very different economies of the United States and the U.S.S.R. today, as well as in medieval England, so too are barter transactions found in widely differing economic and politi- cal systems, but always as petty, infrequent, or emergency transactions, never structuring important sectors of economy.

3. There are many sorts of payments and exchanges in kind which are not barter because they are not market payments or exchanges. In rural Vermont today, one may work off one's local tax bill by putting in

186 George Dalton

so many days of labor repairing public roads in lieu of paying tax in cash. But a tax is a politically incurred obligation; whether paid in cash or labor, it is not a market exchange. So, too, and especially in stateless societies as they were organized before European colonial incursion (Highland New Guinea, Australian Aborigines, North American Indians) anthropologists describe many obligatory reciprocal payments and exchanges carried out in ordinary goods and in primitive valuables [43; 42]. These too are not barter because they are not market exchanges.

4. The petty market exchanges in pre-capitalist societies that are best documented were carried out either in cash (coinage), as in medieval Eu- rope (although most certainly barter proper was in use as well [2]), or, as in Africa and elsewhere, with primitive money proper-bars of salt, twists of wire, cowrie shells, gold dust. These served as crude cash, except that the market sector itself was quite small, usually being confined to a nar- row range of produced items and excluding entirely land and labor, which were allocated by non-market modes of transaction [45; 26; 8; 5; 6].

5. When we examine individual and group transactions which are bar- ter, it becomes clear that in each instance there are special reasons ex- plaining why the participants employ barter rather than an alternative known to them. This is a matter of some importance because wherever barter exists, so too do non-barter alternatives, which are always known to the barter participants and which are quantitatively much more impor- tant in the larger economic systems in which the petty or infrequent barter transactions occur. I will describe a sampling of such barter transactions drawn from markedly different types of economic systems, going from the familiar to the esoteric, and point up the special circumstances making barter preferred to known and more important alternatives.

Consider baby-sitting cooperatives in the United States. Fifty married couples with small children agree to exchange baby-sitting services, either on a pricing schedule that ignores the day of the week the sitting takes place or that prices weekend sitting higher than weekday sitting (say, two hours of weekday sitting equals one hour of weekend sitting). Note that there is a market alternative much more frequently used to buy baby- sitting services: simply hiring a baby-sitter for cash payment. Those who choose the less common baby-sitting cooperative do so for special reasons. Most likely, they have low cash incomes and prefer to exchange their own labor time rather than cash for baby-sitting services. Some, perhaps, also prefer adults to sit with their children rather than juveniles (who usually supply sitting services for cash payment).

An ethically flexible dentist in the United States repairs the teeth of a carpenter in exchange for carpentry services in the dentist's house. Again,

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this is an uncommon alternative to each buying services for cash from the other. Both engage in barter to evade taxes. (Illegal barter transactions as well as illegal moonlighting for cash fees are growing in quantity in East European communist economies [24]).

Consider the foreign trade carried out through barter in Hitler's Ger- many. This, too, was a special case chosen by the Germans in preference to conventional market modes of international trade using currencies or foreign exchange. Its rationale was to avoid having to earn foreign ex- change by exporting (in a depressed world economy) as a necessary con- dition for importing. The barter arrangement was a device which created exports and imports simultaneously, thus obviating the need to earn for- eign exchange.

An especially revealing instance of barter is described by Malinowski for the Trobriand Islands in 1915 [28; 29]. It is especially revealing be- cause of the wealth of detail he gives and because the barter transactions are so clearly contrasted with non-barter alternatives (transactions of reciprocity) available to the Trobrianders. Persons from socially despised lineages (Malinowski calls them "pariahs"), occupying poor land incapa- ble of supporting them, made wooden utensils which they bartered for yams at haggled yam prices with people of socially superior lineages. Malinowski emphasizes the point that the yam growers despised both the wooden utensil craftsmen and their barter mode of transacting (gimwali). It is an impersonal transaction between social strangers, no enduring re- lationship is possible, and it is strictly confined to petty exchanges of wooden utensils for yams. Malinowski contrasts such petty barter with the several sorts of reciprocal gift-giving transactions in the Trobriands (wasi, kula). As with the other instances of barter described above, here, too, there are special reasons explaining why barter is employed rather than a known and more important alternative.

The most arcane instances of barter occurred in "silent trade" (also called "dumb barter"), a widely reported mode of conducting material exchanges in kind between trading parties coming from different political societies [20; 27; 36]. The peculiar circumstance was that one of the trad- ing parties was on an expedition, arriving from far away, and therefore they were regarded as dangerous social strangers by the group with whom the traveling strangers had come to trade. Typically, the trading groups avoided face-to-face contact. The visitors left trade goods on a beach or in some other neutral place and then withdrew; the local people took the foreigners' goods and left their own trade goods at the same place to be retrieved by the visiting traders. There are many variations in such silent trade, but the principle is the same. Again, there were special reasons for

188 George Dalton

employing barter as opposed to a known alternative: The stranger group was regarded as potentially dangerous, and contact with them was to be avoided. The group visited was usually a primitive society employing no medium of commercial exchange in which the trade could be carried out. It is noteworthy that when long-distance traders did come into frequent and sustained face-to-face trading contact with primitive groups, or when the trading parties in sustained contact were from similar sorts of societies (early trade between Japan and China, for example), modes of exchange other than barter were employed [43; 38; 1; 33; 17; 18; 47].

To conclude: Moneyless market exchange was not an evolutionary stage in the sense of a dominant mode of transaction preceding the arrival of monetary means of market exchange. Barter occurs very widely in past and present economic systems, but always as minor, infrequent, or emer- gency transactions employed for special reasons by barterers who know of alternative and more important ways of transacting.

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