Mass quarantines threaten to send the American economy back into the stone ages. The economy has crashed, now entering a depression in the second quarter, people are adapting to the new reality of lockdowns and a pandemic, which has triggered the widespread use of a trading system founded centuries ago, called the barter system.
Now, there's a modern twist to bartering today; that is, it has become digital, found on community apps and or social media.
In particular, people are bartering groceries on the hyperlocal social networking service called Nextdoor because local supermarkets have run out of certain products.
My Nextdoor app is starting to sound a lot like your animal crossing conversations, with neighbors constantly talking about wanting to trade each other oranges for limes or lemons for oranges.— Samantha (@SamKallis) March 23, 2020
When I saw this Nextdoor post had 31 comments I thought for sure this person was getting dunked on by snarky commenters. But no! It was 31 comments of people actually trying to get this person sugar, some even willing to trade for cat food! pic.twitter.com/M0837YvOIr— Joe Saylor (@JSaylor) March 25, 2020
Nextdoor has turned into a bartering site lol I am currently trying to trade 5 pounds of flour for yeast. Saw someone trade an entire ham for a pack of clorox wipes.— jiggle ᛕᎥ丅丅Ƴ 🛸 (@sillykitty1988) March 25, 2020
The bartering system usually becomes prevalent in a collapsed economy. This was the case several years ago when Venezuela's monetary system imploded, and to survive, citizens bartered goods and services with one another.
Facebook has also seen an increase in volume of people swapping toilet paper for hand sanitizer, or even in some cases, Malbec wine for virus masks. Mom and pop businesses are now resorting to bartering as cash flows decline, with most non-essential businesses shutdown across the country, reported Bloomberg.
"When cash is extra tight, it behooves us to buy as much as possible on trade," said David Yusen, director of business development for Seattle-based Heavy Restaurant Group, who recently turned to a local online barter exchange to purchase 56 cases of Malbec wine for $15,000 with barter credits. Yusen's ten restaurants have closed, but some locations will start offering pick-up and delivery in the near term. "It saves us money, and it helps cash flow."
Barter exchanges across the country have reported increased activity since tens of millions of people have been ordered to "shelter-in-place," and millions of others are out of work with no incomes and limited savings, bartering appears to be the next big trend in the "greatest economy ever."
The International Reciprocal Trade Association (IRTA) represents 100 barter exchanges across the country; each has reported a 20% to 35% increase in members since the lockdowns began in early March, said Ron Whitney, president and CEO of IRTA.
"These are challenging times for us, but it also represents an opportunity for us," Whitney said.
IRTA data shows $12 billion to $14 billion barter trades takes place every year. However, in a crashed economy that is hurling towards Venezuelan-status, that number could be significantly higher in 2020.
Roger Becker, a Washington state-based contractor, said his business had dropped significantly since the outbreak in February. To supplement his lost income, he recently signed up for barter exchange BizX.
"A couple of months ago, I never would have thought of it," Becker said. "It's going be a game-changer because we are all starting to get pretty fearful about people tightening up their pocketbooks."
BizX, based in Bellevue, Washington, said its web traffic had jumped 30% in the last few days. International Monetary Systems, another barter exchange that is based in Milwaukee, has seen traffic double over the last two weeks. The Green Apple Barter exchange in Pittsburgh has seen a 20% surge in membership since the lockdown started in early March.
America is reverting to a barter system at the moment as the economy crashes into a depression in the second quarter. Growing barter systems usually surface in collapsed economies, such as Greece, in 2015, and Venezuela in 2018.
The rebirth of the barter system is underway in America.