Have you ever traded something you have to a friend for something they have? You may not have known it, but this “bartering” is one of the oldest forms of exchanging value.
Here’s a transcript of our conversation:
Connor: Hey, Brittany.
Brittany: Hi, Connor.
Connor: If you, Brittany, wanna buy something at a store, you go in, you know, pick the item that you want, you go to the checkout counter, and what do you give them in exchange for being able to walk outta the store with what you want?
Brittany: I give them my hard-earned Fiat dollars.
Connor: Fiat dollars. You give them money, cash. Yes. Swipe a credit card. Whatever.
Brittany: I actually use my phone everywhere now, so I just tap my phone.
Connor: There you go. Fancy. Pretty soon you’ll have, you know, the chip and your wrist, like the new world order wants,
Brittany: Oh, goodness.
Connor: This to topic for another day. Okay. So, you exchange money. That’s what I wanted to get at. You’re giving them money. For that item. Now, you know, this, this practice, this exchange is pretty much the same in every, what we’ll call, you know, civilized society. And governments have decided, you know, on a form of money, each different country has a different currency. So in the United States, we have the dollar. And what really threw me when I was younger is that other countries also have dollars. They’re just not US dollars, but they call their currencies.
Brittany: Who else calls? Dollar calls it a dollar.
Connor: You’re gonna put me on the spot now, and I don’t remember. There’s a handful. There’s a small handful, so I didn’t.
Brittany: Interesting there listeners, there is your homework. Homework for a week.
Connor: Yeah. And so we use these dollars in exchange for goods, which is like, you know, food or things or whatever, or services like, Hey, I want you to come pull weeds or, so it’s like labor. You’re getting someone to work for you. So goods and services. Now, you know, this is the way it’s done and we kind of go along with it. We just assume like, oh, it’s the way it’s always been or whatever. But, you know, I, there’s problems with this system. I think all the listeners will certainly, recall the creature from the Jekyll Island book, where when the government is involved in the creation of money, when they say, you know, this is our fiat money, Fiat of course, meaning that this is money because we say it’s money, we’re ordering everyone to use it, right? That’s fiat currency. And so when the government is involved in that, we’re seeing it right now, all this inflation printing a ton of money flooding the economy with, you know, dollars making our existing dollars worth less. And so the dollars that we have today can buy less than, you know when our grandparents were alive and the story creature from Jekyll Island. We have Grandpa complaining about the price of movie tickets, right? When I was your age, it only cost this much, right? And that’s a very common thing. I’m not that old, Brittany, you’re not that old, but I was in the store the other day looking at a candy bar, and it cost like four times more than when I was a teenager, you know?
Brittany: Oh, it’s so bad. Yeah.
Connor: Things have, have just gotten crazy. And so this is the problem when the government is involved, in money. And so, one thing that I think would be important to talk about that the topic of today’s lesson is how did it happen before this, right? I mean, there was a time before governments were declaring things to be money when people were even using gold. How did people buy the stuff that they wanted before? Well, they did something called bartering. So Brittany, why don’t you maybe kick this off? Tell us, what bartering is and then we’ll go from there.
Brittany: Yeah. So like you said, when I buy something or you buy something, we exchange money for an item, right? And the value of that item equals the value of the dollars it costs. And the reason we know that is because you’re willing to pay that amount, right? Basically, an item’s value is whatever you are willing to pay for it. Because if you wasn’t, then you wouldn’t buy it. So let’s say you don’t like the price of store sets. Obviously, you don’t buy it and you go about your way or you find somebody else, who has it for less. So let’s get into bartering. So that’s how we do it with the money system. Bartering is where instead of money, we exchange items for items. So the value is a little bit different. So Connor, let’s say you need tomatoes and you don’t have any tomato plants in your garden and you don’t want go use the money at the store, right? But you do have bees in your backyard. I do. So you have delicious honey. And as it turns out, your neighbor has tomato plants, but no honey. So what do you do? Do you trade or barter? It’s basically, I don’t, I think it’s pretty much the same thing. I don’t think there’s any difference. So you trade with each other. So you get tomatoes, your neighbor gets honey, and, it’s a win-win for everybody. So bartering takes out the money part and it allows individuals to trade with each other. But you’ll notice it’s still value for value, right? You valued the tomatoes and so you were willing to trade your honey, which your neighbor valued. And so everybody walks away happy. So, it’s goods and services exchange for goods and services.
Connor: And I might say, not only is it value for value it’s a win-win, as you say because each person values the other thing more. In other words, I have a lot of honey from my bees. But I don’t have any tomatoes. So I value your tomatoes more than I value my jar, that extra jar of honey because I have already other jars. Yep. So that, you know, the hundred jars that I have doesn’t have a lot of value to me. ’cause I’ll still have 99. And so I’m willing to part with that because I very highly value tomatoes, which I don’t have any of. Whereas for you, if you’ve got tomatoes coming out your ear in your yard, same thing, right? Like you don’t value any particular, you know, bag of tomatoes that much. Cause you’ve got a ton. But you do value honey a lot because you’re not a beekeeper you don’t like, you know, the idea of having to get stung. and so you’d rather just barter with me. But, you know, bartering, it’s kind of cool. It goes all the way back to like 6,000 BC and ancient Mesopotamia. And, there was this tribe that would travel and they would offer their unique items only for items found in other countries and other tribes. And so that’s how you’d get items from different parts of the world. You know, coming to far-off places. Salt, for example, was a big barter item. Uuring these times it was high in demand. People valued it strongly. You know, Roman soldiers were even paid in salt, which is sounds kind of funny. You know, here’s your bag of salt for the week. Good work Gron soldier. But you know, the salt had value. People were happy to trade their services for it. So Roman soldiers would say, yeah, I’ll, you know, do my week’s worth of work or I’ll go do latrine duty and you know, clean everything out ’cause I want salt. And so bartering seems to make a lot of sense. In fact, in our new America’s history book, which man, if you guys don’t have it yet, like you’re super fans, you’re listening to our Tuttle Twins podcast and you don’t yet have our amazing 240-page American history book. And you know, school season is upon us. What’s wrong with you? Come on, go get the book, Tuttletwins.com/history. And when you do, or for those of you who already have it, which is probably most of you by now, you’ll know that we started American History all the way back in the 12 hundreds. Now, why did we do that? Well, we did that because there’s a lot of people out there trying to attack American history by saying that it really started in 1619 with the importation of slaves. That the story of America is the story of slavery. We built this country on the backs of, you know, enslaved black people. And that’s kind of the narrative that these people are pushing. Now, it doesn’t mean that they’re factually incorrect about 1619 and slavery and all these things like those things actually happened. But the narrative that they’re using, the frame that they’re using to kind of color all the events that is wrong. And I believe it’s wrong for this reason. When we did our book, our American history book, we started all the way in the 12 hundreds. When you open chapter one, it’s all about Marco Polo. You know, it’s all about early trading along the Silk Road. Now, why would we go back half a millennium to the 12 hundreds to talk about that? Well, it’s because to understand America, you have to understand why it was created. It was created because of colonization. All these colonies. Well, why were these empires around the world creating colonies? Well, it’s because they wanted resources that explorers were finding. Why were these explorers embarking on ships going all the way across the world, risking their lives? Well, what were they doing? They were in going out in search of, special spices and jewels and all kinds of unique items that they could bring back to the Silk Road, to this bustling market, this dynamic market where people were buying and selling and trading all kinds of stuff. So barter was exploding. There were people who had all kinds of things that they were doing. And so the history of America for us is a history of free trade, a history of people wanting to make their lives better, which led to exploring far-off lands, which led to, you know, an unfortunate period of colonization, but that gave its way to America and throwing off the shackles of the crown and the greatest, perhaps experiment and political self-governance that the world has ever seen. So that’s the story of America, and it’s really a story of trade and of bartering that kind of triggered it all, which is kind of fascinating to think about. But, then why do we use money? It’s, money, it makes things so much easier, of course, because if I hate tomatoes then I don’t wanna barter with you. If you have tomatoes right, or if you don’t like honey or you’re allergic to it or whatever, then that trade doesn’t work. And then we might stand there thinking like, okay, well what else do we have to trade? You know? And let’s say actually I do really want tomatoes, but you don’t want honey. And you’re like, okay, well we can’t do that. I guess we can’t trade. So then I have to think, okay, I have chickens. Does she want eggs? Nope. You don’t want eggs. You have your own eggs. Okay, well I got, you know, some nice paper booklets. Would you like that? Like I’ve started like thinking up ideas that I can do to trade with you. Money makes it all go away. It’s what’s called a medium of exchange. And what that means is like that we all value the money. So we don’t need to value the individual things that we’re selling. We do these children’s entrepreneur markets. We’ve done them in Utah for like five years. We’re actually taking them to five new states next year.
Brittany: Ooh, that’s exciting.
Connor: And then we’re expanding them to 10 more states, in the following year. So we’re gonna start to grow this into a national brand under the Tuttle Twins. So it’ll be the Tuttle twins, children’s entrepreneur market. And so maybe we do an episode all about this and we can share more.
Brittany: Yeah, I just made a note of that actually.
Connor: But, these markets are fun because you have these kids all stacked up together selling all kinds of stuff, but then they’re all buying from one another too. And then they don’t have to worry about barter. At our first market, which we did five years ago, there was a lot of barter, like my kids were trading, I think one of them traded a PVC marshmallow shooter, for like a Harry Potter wand, you know? And so sometimes it works.
Brittany: It’s a solid trade.
Connor: It is a solid trade. But, money makes it easier because then it’s like, Hey, I sold this to some random person. They gave me money. And with this money, I can buy anything. I don’t have to worry about finding something that that person likes. I can just give them the money. So money is useful because it’s a medium of exchange. It just means that barter while nice and convenient in less civilized societies, perhaps money makes it easier to facilitate more trade. Cause it just means that I don’t need to have an awkward conversation with you to try and figure out what you like. So I can get your tomatoes, I can just give you money ’cause you want money. ’cause you know, you can take that same.
Brittany: Can do whatever, yeah.
Connor: Yeah. Go do something else with it.
Brittany: Yeah, I think that that is a perfect example of it. And it’s funny to me, if you look at when bartering has come up again, cause like you said, it’s been going on since 6,000 BC and we might associate it with like a less sophisticated, and I’m saying that in, quote, in air quotes, scare quotes, time. But bartering has actually had these little waves of becoming popular again in American history. And this is gonna be shocking to you. It’s been during times of, depression and recessions. Because it becomes time when money starts being trusted. Government money, I should say, because the government is in control of our money supply. It’s been in times when the government is messed with the money and people can’t afford things and inflation is out of control, which makes perfect sense if you think about it, right? It’s this distrust of what the government is doing with our money. And so people are like, all right, well maybe we just do some under the table, under the table meeting behind the government’s back, you know, trading instead. So that’s interesting to me. When you look at the rises in bartering in modern times, kind of modern time.
Connor: I Have, a family member who’s, a lawyer and they will regularly trade their services, I guess kind of on the black market maybe, I don’t know. They’ll be like, Hey, I need, a new like kitchen countertop. Are there any carpenters out there who need some legal work done?
Brittany: And that’s cool cause everybody needs a lawyer at some point.
Connor: Right? Yeah. Inevitably this person will find someone and they do a little barter. And I guess maybe that’s a way to keep it off the, you know, the books so that, the IRS doesn’t come after you for taxes, or I don’t, I actually don’t quite know what, how bartering works for, since no money’s involved, maybe that means there’s no taxes. And so it’s a way to, get goods and services without having to pay taxes. Now I’m kind of thinking in the back of my mind, Oh, maybe I should look into this and.
Brittany: I’ll give you 10 Tuttle Twins books for your attorney services, sir.
Connor: So, I think this is, it’s something that breaks down easily because again, it’s hard to find someone who wants exactly what you have to offer. It could have some use cases. I like Brittany, what you point out is that with, you know, depressions and recessions, maybe there’s not a lot of trust in the money. Maybe it’s kind of a black market thing. We’ve talked before about how black markets get a bad wrap. Black markets are actually free markets. It means, you know, you don’t have all these regulations and taxation all these government problems doesn’t mean they’re amazing. There’s challenges and problems. If you, you know, go the black market route can be kind of dangerous because you’re, kind of operating in the shadows. But, bartering kind of lives there too. But as we’ll talk about in the next episode, there’s all kinds of other opportunities as well, with parallel economies to find ways to connect with other people, to trade with other people, to do it outside of the watchful kind of gaze of the state. So fun topics to think about, maybe even to act upon a little bit. We’ll see you in the next episode, Brittany. Thanks as always. And until next time, we’ll talk to you later.
Brittany: Talk to you later.