February 8, 2011 • 27 mins
Bartering is an ancient practice. With the emergence of money-based transactions, it's no wonder that people might think bartering is a thing of the past. Tune in to learn more about the bartering process -- and where it's still used today.
Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Brought to you by the reinvented two thousand twelve camera.
It's ready. Are you welcome to Stuff you should know
from House Stuff Works dot Com? Hey, and welcome to
the podcast. I'm Josh Clark with a barely awake Charles W.
(00:20):
Chuck Bryant. Who's drowsy? I'm not drowsy. You look drowsy? Really, Yeah,
that's totally different. When you get to be forty, you
just you look drowsy all the time. Are you rested?
I just woke up? Crud? Yeah, I got something to
look forward to all downhill, buddy, I'll tell you something
that the prisoners in Florida's state penal system have something
(00:42):
to look forward to, springs off fall. In addition to that, okay,
buying honey buns at the commissary? Is that? Is that
the new guy on sub black Sea? You know what
I wrote about this, and somebody had a funny comment
like that honey buns joke? Yeah, uh no, which is
(01:02):
really terrible joking. I think about it, but um no
actual honeybuton you know, like the pastry dessert. It's the best.
Love it, do you? It depends on which brand you're
talking about. In my opinion, Krispy Kreme honey buns are
pretty rocking. I never tried about are they frosted? Oh,
I've got to try one of those. I had no idea. Yeah, wow, Okay, Well,
(01:23):
the ones I'm talking about coming cellophane. They're sold for
about a buck or so UM in prison, so you know,
it's not the greatest brand on the planet probably probably
um And apparently in Florida, I think around the country,
but in Florida in particular, they're like the new prison currency.
Honey buns are because it's a new product that people
(01:43):
just crave. No, it's just been kind of quietly building
up over time, and everybody's been making the cigarette joke
for decades and didn't noticed that, actually tobacco is out
sold in the in the Florida State penal system by
honey buns. Everybody loves a honeybun. Yeah, so we're envelope.
They're like the number one seller in state prisons in
(02:05):
the county. In the county lock up, uh free dried
coffee and ramen noodles still outsell honeybuts. But if you're up,
if you're up the river in the state, honey buns
are number one. Wow, and then envelopes because people are
clearly like to write their letters, right, yes, or they
use envelopes as napkins for hunting buns. It's just dumb
(02:25):
if it seems like they would give them envelopes. Come on,
if these guys are gonna take the time to write, somebody,
give them an envelope. No, you gotta buy it, Yeah,
with your thirty five cents an hour making license plates anyway. Um,
so these honey buns are They're used as bribes for protection. Um.
(02:47):
They're used in exchange for other food items, maybe some
envelopes if you're running low. Right, they're used for bets
as wagers. Seriously, there's a really cool article in St.
Petersburg Times that was really well written about it. Right,
but what these people are doing, Let's say in the
case of a bribe, Let's say, um, Todd, the white
(03:09):
collar criminal who somehow ended up in a state prison,
is paying Tiny, the ironically named huge guy, for protection
in honey buns. What's going on there is bartering. Todd
is bartering a honey bun in exchange for Tiny's service protection,
(03:32):
beating the tar out of guys who want to take
Todd's honey buns or he himself not doing that with
his own cronies. Now that's a racket, that's that's not
necessarily the same thing. Oh yeah, still trading without money,
I guess. So okay, So, so we've finally reached the
end of that god awful intro and we're now talking
(03:54):
about bartering, Chuck bartering new or old old old as
the hills, Uh, the earliest civilizations. Josh bartered for stuff
because there was no currency back in the day. So,
I mean, you know, caveman took took that. We always
talked about cooktok trades. Uh, you know animal pelt for
(04:15):
spear made from rhino horn. Yeah, because he's he's like,
I've never seen one of those, but I've got all
these great pelts, and you look a little cold. So
let's work out a deal here parting it is, And
you're absolutely right, it is pretty old. Um. It really
started to take off after we left our hunter gatherer roots, though. Yeah,
once we settled down into communities. Yeah, it made a
(04:37):
lot more sense. Um, you might be some sort of
farmer and end up with a surplus. You've got all
the grain you need, but you need some meat too,
And this guy over here has some pigs that have
been looking pretty delicious lately. So you trade them some
of your surplus grain for a pig, and the guy
who has pigs gets some of your grain, and he
(04:58):
has pigs. You have pigs and grain to everybody's happy. Yeah,
Jerry thinks this whole thing is funny for some reason.
Uh yeah, I mean that's how it all started. I
actually did a report in um elementary school. We had
to social studies report where we had to devise a
city of our own, like a town, and we had
(05:18):
to construct you know, how it all looked at and
what they did. And I was the only kid who
had a barter system instead of money. The teacher thought
at the time that that was very you know, a
very smart kid for doing that, because I was, you know,
like nine years old. Every once a while, you just
kind of like drift off while you're taking a shower
thinking about the congratulations the teacher gave you that day.
(05:38):
That was my last one congratulations chuck. So that has
stuck with me all these years though, that it's funny
that as a little kid, I thought bartering was kind
of a cool system, and it and it was and
it still is. We'll find out. Yeah, um, there's a
there's a lot of cool. Maybe cool is not the
right word. I don't think cool is an economics term,
but there's it has a lot of benefits and that uh,
(06:02):
Bartering generally doesn't lead to surplus, right, it leads to
um basically people just having what they need. Yeah, you're
exchanging something you need or something you have that someone
else needs for something that you need. And in most cases,
most cases, you don't want a whole lot of leftovers.
You just kind of you have something that you're willing
(06:22):
to exchange for something else. Everybody's seeking an even trade,
so nobody's giving anybody a lot more than they need
or you know, conversely screwing the other person over and
taking as much as possible because both parties have to
be cool with it. Right, there's no trade, so there's
not a lot of surplus. Not a lot of surplus.
To anyone who's read Jared Diamonds, the greatest mistake in
(06:45):
the history of the human race means that you don't
necessarily have anybody who's in charge or has control over
other people. By controlling the surplus interesting very well. When bartering, Josh,
it's everything's relative obviously, because if you need if you
live someplace where it's cold and you need more shelter blankets,
(07:06):
let's say or whatever, or let's modernize and say heater,
or then that's going to be pretty valuable to you. Right. Um,
what you're talking about is the relative value of an item,
right exactly. So like in a money system, like there's
a fixed value to the dollar, and it fluctuates, you know,
there's inflation and deflation and stag inflation. But ultimately, when
you're coming to somebody with a dollar, you both have
(07:29):
an agreed upon awareness of what that dollar's worth, which
is a dollar, Like you were saying, with a heater,
somebody who lives in a hot climate is going to
value that thing less than somebody who lives in a
cold climate. So the person in the cold climate would
be willing to pay more or trade more for that
relative value. It's the distinction between um, bartering and money,
(07:51):
one of them, um, but the main one. It's my favorite.
Timing is another big deal when it comes to bartering,
because depending on when this is happening and what your
situation is things canna have a different value. Uh. The
article used an example of Richard the third my Kingdom
for a horse when he was in a battle. Uh.
I was on a hike in Utah one time where
(08:12):
I would have paid a thousand dollars for a bottle
of gatorade or lift down the hill and I wanted
the gatorade? Was that hot and dehydrated? Yeah? It was bad?
Did you were you hospitalized? Now? Now we we hiked
out and made it to the spot and bought like
five gatorades and drank them all. Your urine was just
chunky style, A little bit came out, a little pebbles.
(08:34):
Uh So Yeah, timing has a lot to do with
the value of something as far as how much you
might need that item. Yeah. And Jane McGrath wrote this one. Jane,
she did a good job to remember Jane. Yeah, let
me ask you this, what about when it's not just
a one to one deal, Like you've got corn and
your friend, uh, Ralph next to your farm has cows.
(08:58):
But Ralph doesn't want corn, he wants wheat. But your buddy,
your Yeah, your buddy Pete has wheat, so you want
you can arrange a little three way trade there if
you're an innovative guy, and it's called a triangular barter.
And NBA teams do this. Any sports team can, but
it happens more than NBA than anywhere else and stuff,
(09:18):
well just trading players like you know, I want your center,
but you don't want my point guard. You want there forward,
but I'll take their forward and package it in such
a way that it's accommodates everybody. Huh. So that's a
triangular barter, which so you you you are pointing something
out and that it's not necessarily the most common thing
in a barter economy where you have something that I
(09:41):
need and I have something that you need at that
moment too. That well, that's what works because we talked
about timing and relative value, right, that's one of the
downsides of the barter. And it gets even more complex
than a triangular barter. That's a lot of work, you know,
that's a lot of walking. You know, Um, if you
find that third person and so, um Ralph has that
(10:01):
cow you want, Pete has wheat, You have corn, but
Pete doesn't want your corn. You're gonna have to go
find somebody who wants your corn who has something that
Pete would want, yes or more, which is called the
multilateral trade. You can see it gets kind of convoluted
as well. You know, well, and when it gets convoluted,
(10:22):
there's a greater risk for making a bad deal just
to get it over with, just because you really need
that cow. And that's one of the you know, we'll
talk about the downside. It is certainly one of them. Yeah, well,
well I think we kind of are all are we
already there? Okay? Well, that's one of the downsides is
that a lot of work goes into this, and in
the end you might settle for less than a great
(10:43):
deal because it's there's so much work involved. Um, there's
some other factors that might force you to settle for
poo poo deal, and that is um, time works against you.
You remember we kind of used the example of you
with the gatorade. Yeah, yeah, right, Um, were you somebody
who had something to trade for that gatorade at that
(11:06):
moment and somebody came along with gatorade and gouged you?
Say you had tomatoes to trade, right, You kind of
need to trade your tomatoes because they're a perishable item.
So time is working against you, so you might take
a bad trade. It's just to get rid of these tomatoes,
right right, or in the article example is a great one.
Let's say you're a craftsman. You build these great banquet tables.
(11:28):
Banquet tables are big and heavy. You go to trade
for tomatoes because you really need those tomatoes. And the
guy was like, hey, you know, I mean, I'll give
you fifteen tomatoes, and I was like, no, this is
worth like three hundred tomatoes. But what are you gonna
do with three hundred tomatoes. So it's when you don't
have equal You've got a lot of small things, you
have one large thing. You're kind of in trouble. I
(11:49):
don't know if you pick the right business model. Yeah,
as a craftsman, and even if you even if you
did take, uh, three hundred tomatoes, you're gonna run around,
you know, trying to trade those surplus tomatoes for you know,
um other stuff you may or may not need, which
when you could be building tables. You should be building tables.
It's what you do, it's what you're good at. Yeah, exactly.
(12:12):
So that's because you know, bartering initially sounds like, oh
that's so great. You just trade things and there's no money,
and money leads to badness. But it's not that simple.
It's rare that you just find that perfect match and
perfect timing to work out in a wonder one trade
and then establishing that that value considering that everything in
(12:33):
a barter system has a relative value. You know, there's
as Jane put it, you know, comparing apples to oranges
is still comparing you know, fruit of roughly the same
shape and size. She yeah, she points out that it's
a terrible thing. It's like the low man on the
totem pole. Yeah. I gonna start saying, Uh, that's like
comparing cows to table legs exactly. People like, what the
(12:56):
heck are you talking about? You just be like, listen
to the podcast exactly. So chuck Um. Because our ancestors
are four people, UM ran into these problems where they
couldn't figure out how many tomatoes equal the table, and
when they did, it just was way too much. They
got tired of lugging tables around. Um. They came up
(13:19):
with something that we call money currency and it solved
a lot of problems for all of its drawbacks and
ills and evils. Uh, money solved a lot of problems.
It's easier to carry money around than a table, for one. Yeah,
think about how much a hundred dollar bill ways. Not much,
not very much. It sits heavy in my pocket, though,
my friend, it burns mine, It burns all. It can
(13:43):
also be divided pretty easily. Sure, you know a hundred
one dollar bills still isn't as heavy as a table, right, Yeah, well,
and it levels of playing field, like you said said,
then you don't have to compare tomatoes to tables. It's
pretty easy to set your price. If people want to
buy it, great, then you got your dough and you
can just buy your two tomatoes for dinner that night.
(14:06):
But a cool, that's uh, that's money. You I'm sensing something.
Are you cool with this one? Or you like the
barter system? No, it's fine. Which would you prefer money
or barter? Uh? Well, I mean as a nine year old,
I thought bartering was kind of neat, and I still
like the concept of trading, like the musical instruments section
(14:27):
on Craigslist is is lousy with dudes like I'll trade
my list Paul for your Martin acoustic. Right, so you've
you've hit upon a the modern revival of bartering. It's
all over the place. Actually, yeah, I think Craigslist has
an entire section for each city dedicated to bartering, specifically
right sub sections in the I don't know this, you know,
(14:52):
I think Craigslist does have a section. But on like
the music Instruments board, there's people trading just because that's
where they seek trades. But um, there's whole sites dedicated
just to bartering and bartering services. That's got to be included. Yeah,
Emily actually does that. I didn't know that. Yeah, she'll trade. Uh,
she's been getting her hair done in exchange for soap.
(15:14):
And actually the craft scene, the indycraft scene, this like
that's all they do is trade, Like you know, I'll
give you this kid's jumper for a bottle of lotion
and this is uh, you know, bartering is pretty old,
but a resurgence and bartering isn't new. Um. There was
actually an explosion in the late seventies of barter clubs.
Not to be confused with racquetball clubs or swingers clubs,
(15:37):
which were both also huge in the late seventies. These
were barter clubs really. Yeah, they were around for a
little while so people meet and swap things. Um, I
think it was mail order. Oh yeah, okay, but when
you take a look at these clubs then and today,
what you described Emily doing is is pure bartering. Um.
(15:58):
But you know one of the big limitations of bartering, well,
two of the big limitations are geographic boundaries, right, which
which the Internet overcomes because you know, some guy in
Tacoma has something you need is willing to ship it,
and you have something he needs. Geographic boundaries gone, right,
But the timing thing is still a problem. So what
(16:19):
barter clubs and barter websites have come up with is, um,
if if the person doesn't have anything to give you, right,
then they can trade you in credits. Yeah. I didn't
know that was going on. That's kind of cool. That's money,
Uh yeah, in a way. No, that's currency. That's it.
Think about a dollar bill. It's a it's a credit,
(16:39):
it's a promissory note. It doesn't hold any inherent value. Yeah,
but only within that network is a currency. Like it's
not like you can take those credits out to McDonald
still say, no, totally, you can't, but it's still currency. Yeah, right,
So like within that barter network. It's still they're still
using currency. It's just so difficult to get past, you know,
the necessity for currency. That's a good point. Yeah, it's
(17:01):
a big shamnon. You were talking about the craft scene
being like huge and bartering, right, they love it. Marketing
is as well, like business barters, way more than I
ever realized. Yeah, I have a stat for you if
I may. Yeah. Yeah. In two thousand and eight, North
American companies, not even internationally, but North American companies bartered
(17:24):
twelve billion dollars in goods and services. Yeah, and apparently
that was partially a result of the recession, because in
two thousand one they did like seven point seven five billion.
But still it's a substantial amount of stuff that was traded,
either in the form of goods or services. Right, people
striking a deal like Chicos bail bonds will sponsor your
(17:46):
baseball team and they'll pay for your jerseys if you
put Chicos bail bonds on the back. Yes, you will eventually.
In the case of the yankees't you remember who their
sponsor was? In bad Newspayers Denny's. Was it really? I
just saw the other day and I'm like, huh Denny's.
They were a high profile team. Oh well, they got
a high profile sponsor. UM. We were talking about the recession,
(18:09):
UM accounting for an increase among businesses. One of the
great things about bartering is you it says you're cash
to pay down debt or to keep workers on the
payroll or the cash is always good for business. Yeah, Um,
So that's why corporations do it. People do it in
times of crisis, which was the case. Well, it's part
of the case right now. There's been a huge resurgence
(18:29):
in UM consumer bartering, right because of the economy. Yeah,
but UM in Argentina and I think two two thou nine,
their economy was really in shambles and they were bartering
clubs everywhere. Well. Yeah, in in places where there's natural disasters,
a lot of times, the first thing they will turn
to was bartering, at least in a in a temporary
(18:51):
sense until they can kind of get things restored, because
I don't know the end of the world. What's what's
that dollar bill going to do for you? You know?
I read almost that same phrase on a post collapse
blog of survival blog and the guy was rambling off
items that will be good for bartering. Dollar bill is
(19:11):
not among them, of course not. I R S. Josh.
Let's let's talk about that, because if you think, hey,
this is a great way to skirt taxes, I can
trade my haircut for my homemade soap all day long?
Am I outing myself? Now? Ask an auditors? Now? Yeah,
because you know you're supposed to report this stuff. Yeah. Um,
(19:33):
those barter clubs from the late seventies actually ruined it
for everybody. Um. Time was you could barter everything and
not pay a cent of taxes on it. But the
barter club that the artificial economy created by the barter
clubs reached about an estimated two hundred million dollars um
in size, and I R. S went, we want some
(19:55):
of that. So they reformed the tax code in and
came up with the ten B form Proceeds from broker
and barter exchange transactions and if you're bartering, you have
to both parties have to fill one of these out,
create like a an estimated market value of the goods
or services and pay it. Hey, you know when Emily
(20:18):
first brought that form home filled it out of it?
What is this you had another form. She said, Yeah,
you can't trade. You gotta pay the piper. And the
piper is the I R S. Yeah, it certainly is, Josh,
but that's not necessarily well that that's a bad thing.
But the I R S. You can also write stuff
off that you you have traded. Yeah, so it goes
(20:41):
the other way a little bit too, And we would
be remiss to not mention that. Yeah, um, you you
can right off as an expense something you trade because
it's value and it's lost and you didn't get any
money for it, which is how the tax systems set up.
If you're not getting any money for it, it's different
and stuff that you're getting money for. Well, and they
(21:02):
point out that if you get one of those trade credits,
you could donate that trade credit to a charity and
write that off if that charity will accept trade credit. Yeah,
I've never heard these trade credits. I can look into that.
It's money. I mean, is it a point value they
assign a wonder. Yeah, there's actually day it's worth this
(21:23):
many dollars. Well, one that I came across, dib space
um had something called Dibbitts and their trade credits, and
there were one dibots worth a dollar, So it's money
based on money in a bartering network. Well money, Did
we ever say that money inflation? That's one of the
downsides of of currency. We didn't say it, but go ahead,
(21:47):
Well yeah, I mean that's the big deal. Like you
buy a peck a bushel of peaches one year for
ten bucks, and the next year that might buy ten peaches.
That's the downside of money. Although I suppose I could
happen bartering too. They could just say, rough, peach crop
this year now, will only trade you this many for
your core. Yeah. That I would think relative value would
be affected by supplying demand. Yeah, I mean that makes sense.
(22:10):
I would think it wouldn't happen on such a widespread level, though.
I mean, think about how many people are affected by
the dollar bill and its fluctuations, right, Think about how
many people are affected by a local peach crop. And
that's actually one of the things that barter systems are
um so appealing to people these days. There's such a
movement towards local economies. Barter system can't be sustained by
(22:33):
a country of three million people, so basically everybody has
to split up. I read an essay about how um
secessionism could save the US and that if we don't
break up, we're in big trouble. Yeah, that any any
non authoritarian system of government can't be sustained or adequately
(22:53):
administered in populations over I think either three million or
thirty million. Yeah, it's pretty cool. As in the Utney
Reader the last month. Get that ought to check that out.
It was the one with Marge Simpson as Rosie the
river Y. Yeah, yeah, it's pretty cool. I'll check that out.
So we're done. I'm done. You got anything else except
for me? If you want to hear mention of Kyle McDonald,
(23:16):
the kid we mentioned in the house Swapping podcast a
little prematurely. I guess who traded a paper clip for
a house? He had to pay taxes on that, he
had to it, I'm sure, I hope. So maybe Corbyn
Burnson paid one. If you want to see a picture
of that kid, you can type in barter at the
search bar at how stuff works dot com and that
brings up, of course, listener a, Josh, I'm gonna call
(23:42):
this one of two eventual mafia letters that we got.
We got very many who knew by letters took means
broken thumbs. Yeah, sit in little boxes? Yeah? Who knew?
So many people are connected to the Mafia day A
lot of people have stories to tell. Yeah. I think
it's also like saying like whose name who his Native
(24:02):
American and him, Yeah, I do a little bit. I think.
Uh so we're going to read two of those, one
of them right now and one on the following episode.
And this is from Calvin. This is pretty interesting. Calvin
the Mafia as Yeah, Calvin the MAFIASA. I just listened
to the episode about the Mafia, and I have a
couple of things to say. Firstly, I am grossly disappointed
(24:23):
in both Josh and Chuck for talking about a Joe
Velichi and not once mentioning the greatest Simpson episode ever,
Homie the Clown. I was disappointed about this one, yeah,
in which Homer disguised this Krusty gets captured by Fat
Tony in the Springfield family and tried to convince them
that he is all different kinds of people, Joe Vlachi
being one of them. I didn't make that connection. I
(24:45):
remember He's like, I'm I'm not Homer, I'm Joe Vlachi,
Joe Lachi, the rat he's like something like that. He said,
if you did mention it, then shame on the editor
Jerry for removing it. So let's just go with that. Ye,
let's go with that one, Jerry, shame mind you boo. Also,
I thought you guys would be interested to hear some
hypotheses about why it is called the mafia. One says
(25:08):
that during the War of the Sicilian Vespers, a woman
found her daughter at the Vespers being raped by French
soldiers and then ran through the streets shouting mafia, mafia,
which is a dialectical translation of my daughter, my daughter,
my daughter, mafia. Did the mafia come to her rescue
(25:31):
or what? I don't know, that's just what he says, Sicilian, Okay,
I mean, I don't think he's making this up. It's
a theory, I'm sorry, hypothesis. The second hypothesis is also
a remnant of the occupation of Sicily by the French.
The word mafia might be an anagram for morta allah
Francia Italia, which translates into something like Italy longs for
(25:57):
the death of France. Yeah a f I A huh.
I don't know about that, but they both sound pretty plausible.
To me. So, I guess the word mafia doesn't mean
anything it's in a family name or anything like. I
don't know. I never really thought about the originally name.
We didn't cover that. So these are two hypothesis from Calvin.
He says both of these came from a book called
(26:18):
The Secret Society's Handbook by Michael Bradley. Might be complete Bologne,
because I'm not sure how reliable that book is, but
it's sure is interesting. I thought you might like it
very cool. Thank you who is that Calvin? Calvin the Mafiosa.
Of course, thank you Calvin the Mafiosa for writing in.
And um, we want to hear from you guys too,
so we would urge you to send us an email.
(26:40):
If you have something to trade, we want to hear
about it. Wrap it up spanking on the bottom and
send it to stuff podcast at how stuff works dot
com For moral on this and thousands of other topics.
Is it how stuff works dot com. To learn more
about the podcast, click on the podcast on in the
upper right corner of our homepage. The house Stuff Works
(27:03):
iPhone app has arrived. Download it today on iTunes. Brought
to you by the reinvented two thousand twelve camera. It's ready,
Are you
Brought to you by the reinvented two thousand twelve camera.
It's ready. Are you welcome to Stuff you should know
from House Stuff Works dot Com? Hey, and welcome to
the podcast. I'm Josh Clark with a barely awake Charles W.
(00:20):
Chuck Bryant. Who's drowsy? I'm not drowsy. You look drowsy? Really, Yeah,
that's totally different. When you get to be forty, you
just you look drowsy all the time. Are you rested?
I just woke up? Crud? Yeah, I got something to
look forward to all downhill, buddy, I'll tell you something
that the prisoners in Florida's state penal system have something
(00:42):
to look forward to, springs off fall. In addition to that, okay,
buying honey buns at the commissary? Is that? Is that
the new guy on sub black Sea? You know what
I wrote about this, and somebody had a funny comment
like that honey buns joke? Yeah, uh no, which is
(01:02):
really terrible joking. I think about it, but um no
actual honeybuton you know, like the pastry dessert. It's the best.
Love it, do you? It depends on which brand you're
talking about. In my opinion, Krispy Kreme honey buns are
pretty rocking. I never tried about are they frosted? Oh,
I've got to try one of those. I had no idea. Yeah, wow, Okay, Well,
(01:23):
the ones I'm talking about coming cellophane. They're sold for
about a buck or so UM in prison, so you know,
it's not the greatest brand on the planet probably probably
um And apparently in Florida, I think around the country,
but in Florida in particular, they're like the new prison currency.
Honey buns are because it's a new product that people
(01:43):
just crave. No, it's just been kind of quietly building
up over time, and everybody's been making the cigarette joke
for decades and didn't noticed that, actually tobacco is out
sold in the in the Florida State penal system by
honey buns. Everybody loves a honeybun. Yeah, so we're envelope.
They're like the number one seller in state prisons in
(02:05):
the county. In the county lock up, uh free dried
coffee and ramen noodles still outsell honeybuts. But if you're up,
if you're up the river in the state, honey buns
are number one. Wow, and then envelopes because people are
clearly like to write their letters, right, yes, or they
use envelopes as napkins for hunting buns. It's just dumb
(02:25):
if it seems like they would give them envelopes. Come on,
if these guys are gonna take the time to write, somebody,
give them an envelope. No, you gotta buy it, Yeah,
with your thirty five cents an hour making license plates anyway. Um,
so these honey buns are They're used as bribes for protection. Um.
(02:47):
They're used in exchange for other food items, maybe some
envelopes if you're running low. Right, they're used for bets
as wagers. Seriously, there's a really cool article in St.
Petersburg Times that was really well written about it. Right,
but what these people are doing, Let's say in the
case of a bribe, Let's say, um, Todd, the white
(03:09):
collar criminal who somehow ended up in a state prison,
is paying Tiny, the ironically named huge guy, for protection
in honey buns. What's going on there is bartering. Todd
is bartering a honey bun in exchange for Tiny's service protection,
(03:32):
beating the tar out of guys who want to take
Todd's honey buns or he himself not doing that with
his own cronies. Now that's a racket, that's that's not
necessarily the same thing. Oh yeah, still trading without money,
I guess. So okay, So, so we've finally reached the
end of that god awful intro and we're now talking
(03:54):
about bartering, Chuck bartering new or old old old as
the hills, Uh, the earliest civilizations. Josh bartered for stuff
because there was no currency back in the day. So,
I mean, you know, caveman took took that. We always
talked about cooktok trades. Uh, you know animal pelt for
(04:15):
spear made from rhino horn. Yeah, because he's he's like,
I've never seen one of those, but I've got all
these great pelts, and you look a little cold. So
let's work out a deal here parting it is, And
you're absolutely right, it is pretty old. Um. It really
started to take off after we left our hunter gatherer roots, though. Yeah,
once we settled down into communities. Yeah, it made a
(04:37):
lot more sense. Um, you might be some sort of
farmer and end up with a surplus. You've got all
the grain you need, but you need some meat too,
And this guy over here has some pigs that have
been looking pretty delicious lately. So you trade them some
of your surplus grain for a pig, and the guy
who has pigs gets some of your grain, and he
(04:58):
has pigs. You have pigs and grain to everybody's happy. Yeah,
Jerry thinks this whole thing is funny for some reason.
Uh yeah, I mean that's how it all started. I
actually did a report in um elementary school. We had
to social studies report where we had to devise a
city of our own, like a town, and we had
(05:18):
to construct you know, how it all looked at and
what they did. And I was the only kid who
had a barter system instead of money. The teacher thought
at the time that that was very you know, a
very smart kid for doing that, because I was, you know,
like nine years old. Every once a while, you just
kind of like drift off while you're taking a shower
thinking about the congratulations the teacher gave you that day.
(05:38):
That was my last one congratulations chuck. So that has
stuck with me all these years though, that it's funny
that as a little kid, I thought bartering was kind
of a cool system, and it and it was and
it still is. We'll find out. Yeah, um, there's a
there's a lot of cool. Maybe cool is not the
right word. I don't think cool is an economics term,
but there's it has a lot of benefits and that uh,
(06:02):
Bartering generally doesn't lead to surplus, right, it leads to
um basically people just having what they need. Yeah, you're
exchanging something you need or something you have that someone
else needs for something that you need. And in most cases,
most cases, you don't want a whole lot of leftovers.
You just kind of you have something that you're willing
(06:22):
to exchange for something else. Everybody's seeking an even trade,
so nobody's giving anybody a lot more than they need
or you know, conversely screwing the other person over and
taking as much as possible because both parties have to
be cool with it. Right, there's no trade, so there's
not a lot of surplus. Not a lot of surplus.
To anyone who's read Jared Diamonds, the greatest mistake in
(06:45):
the history of the human race means that you don't
necessarily have anybody who's in charge or has control over
other people. By controlling the surplus interesting very well. When bartering, Josh,
it's everything's relative obviously, because if you need if you
live someplace where it's cold and you need more shelter blankets,
(07:06):
let's say or whatever, or let's modernize and say heater,
or then that's going to be pretty valuable to you. Right. Um,
what you're talking about is the relative value of an item,
right exactly. So like in a money system, like there's
a fixed value to the dollar, and it fluctuates, you know,
there's inflation and deflation and stag inflation. But ultimately, when
you're coming to somebody with a dollar, you both have
(07:29):
an agreed upon awareness of what that dollar's worth, which
is a dollar, Like you were saying, with a heater,
somebody who lives in a hot climate is going to
value that thing less than somebody who lives in a
cold climate. So the person in the cold climate would
be willing to pay more or trade more for that
relative value. It's the distinction between um, bartering and money,
(07:51):
one of them, um, but the main one. It's my favorite.
Timing is another big deal when it comes to bartering,
because depending on when this is happening and what your
situation is things canna have a different value. Uh. The
article used an example of Richard the third my Kingdom
for a horse when he was in a battle. Uh.
I was on a hike in Utah one time where
(08:12):
I would have paid a thousand dollars for a bottle
of gatorade or lift down the hill and I wanted
the gatorade? Was that hot and dehydrated? Yeah? It was bad?
Did you were you hospitalized? Now? Now we we hiked
out and made it to the spot and bought like
five gatorades and drank them all. Your urine was just
chunky style, A little bit came out, a little pebbles.
(08:34):
Uh So Yeah, timing has a lot to do with
the value of something as far as how much you
might need that item. Yeah. And Jane McGrath wrote this one. Jane,
she did a good job to remember Jane. Yeah, let
me ask you this, what about when it's not just
a one to one deal, Like you've got corn and
your friend, uh, Ralph next to your farm has cows.
(08:58):
But Ralph doesn't want corn, he wants wheat. But your buddy,
your Yeah, your buddy Pete has wheat, so you want
you can arrange a little three way trade there if
you're an innovative guy, and it's called a triangular barter.
And NBA teams do this. Any sports team can, but
it happens more than NBA than anywhere else and stuff,
(09:18):
well just trading players like you know, I want your center,
but you don't want my point guard. You want there forward,
but I'll take their forward and package it in such
a way that it's accommodates everybody. Huh. So that's a
triangular barter, which so you you you are pointing something
out and that it's not necessarily the most common thing
in a barter economy where you have something that I
(09:41):
need and I have something that you need at that
moment too. That well, that's what works because we talked
about timing and relative value, right, that's one of the
downsides of the barter. And it gets even more complex
than a triangular barter. That's a lot of work, you know,
that's a lot of walking. You know, Um, if you
find that third person and so, um Ralph has that
(10:01):
cow you want, Pete has wheat, You have corn, but
Pete doesn't want your corn. You're gonna have to go
find somebody who wants your corn who has something that
Pete would want, yes or more, which is called the
multilateral trade. You can see it gets kind of convoluted
as well. You know, well, and when it gets convoluted,
(10:22):
there's a greater risk for making a bad deal just
to get it over with, just because you really need
that cow. And that's one of the you know, we'll
talk about the downside. It is certainly one of them. Yeah, well,
well I think we kind of are all are we
already there? Okay? Well, that's one of the downsides is
that a lot of work goes into this, and in
the end you might settle for less than a great
(10:43):
deal because it's there's so much work involved. Um, there's
some other factors that might force you to settle for
poo poo deal, and that is um, time works against you.
You remember we kind of used the example of you
with the gatorade. Yeah, yeah, right, Um, were you somebody
who had something to trade for that gatorade at that
(11:06):
moment and somebody came along with gatorade and gouged you?
Say you had tomatoes to trade, right, You kind of
need to trade your tomatoes because they're a perishable item.
So time is working against you, so you might take
a bad trade. It's just to get rid of these tomatoes,
right right, or in the article example is a great one.
Let's say you're a craftsman. You build these great banquet tables.
(11:28):
Banquet tables are big and heavy. You go to trade
for tomatoes because you really need those tomatoes. And the
guy was like, hey, you know, I mean, I'll give
you fifteen tomatoes, and I was like, no, this is
worth like three hundred tomatoes. But what are you gonna
do with three hundred tomatoes. So it's when you don't
have equal You've got a lot of small things, you
have one large thing. You're kind of in trouble. I
(11:49):
don't know if you pick the right business model. Yeah,
as a craftsman, and even if you even if you
did take, uh, three hundred tomatoes, you're gonna run around,
you know, trying to trade those surplus tomatoes for you know,
um other stuff you may or may not need, which
when you could be building tables. You should be building tables.
It's what you do, it's what you're good at. Yeah, exactly.
(12:12):
So that's because you know, bartering initially sounds like, oh
that's so great. You just trade things and there's no money,
and money leads to badness. But it's not that simple.
It's rare that you just find that perfect match and
perfect timing to work out in a wonder one trade
and then establishing that that value considering that everything in
(12:33):
a barter system has a relative value. You know, there's
as Jane put it, you know, comparing apples to oranges
is still comparing you know, fruit of roughly the same
shape and size. She yeah, she points out that it's
a terrible thing. It's like the low man on the
totem pole. Yeah. I gonna start saying, Uh, that's like
comparing cows to table legs exactly. People like, what the
(12:56):
heck are you talking about? You just be like, listen
to the podcast exactly. So chuck Um. Because our ancestors
are four people, UM ran into these problems where they
couldn't figure out how many tomatoes equal the table, and
when they did, it just was way too much. They
got tired of lugging tables around. Um. They came up
(13:19):
with something that we call money currency and it solved
a lot of problems for all of its drawbacks and
ills and evils. Uh, money solved a lot of problems.
It's easier to carry money around than a table, for one. Yeah,
think about how much a hundred dollar bill ways. Not much,
not very much. It sits heavy in my pocket, though,
my friend, it burns mine, It burns all. It can
(13:43):
also be divided pretty easily. Sure, you know a hundred
one dollar bills still isn't as heavy as a table, right, Yeah, well,
and it levels of playing field, like you said said,
then you don't have to compare tomatoes to tables. It's
pretty easy to set your price. If people want to
buy it, great, then you got your dough and you
can just buy your two tomatoes for dinner that night.
(14:06):
But a cool, that's uh, that's money. You I'm sensing something.
Are you cool with this one? Or you like the
barter system? No, it's fine. Which would you prefer money
or barter? Uh? Well, I mean as a nine year old,
I thought bartering was kind of neat, and I still
like the concept of trading, like the musical instruments section
(14:27):
on Craigslist is is lousy with dudes like I'll trade
my list Paul for your Martin acoustic. Right, so you've
you've hit upon a the modern revival of bartering. It's
all over the place. Actually, yeah, I think Craigslist has
an entire section for each city dedicated to bartering, specifically
right sub sections in the I don't know this, you know,
(14:52):
I think Craigslist does have a section. But on like
the music Instruments board, there's people trading just because that's
where they seek trades. But um, there's whole sites dedicated
just to bartering and bartering services. That's got to be included. Yeah,
Emily actually does that. I didn't know that. Yeah, she'll trade. Uh,
she's been getting her hair done in exchange for soap.
(15:14):
And actually the craft scene, the indycraft scene, this like
that's all they do is trade, Like you know, I'll
give you this kid's jumper for a bottle of lotion
and this is uh, you know, bartering is pretty old,
but a resurgence and bartering isn't new. Um. There was
actually an explosion in the late seventies of barter clubs.
Not to be confused with racquetball clubs or swingers clubs,
(15:37):
which were both also huge in the late seventies. These
were barter clubs really. Yeah, they were around for a
little while so people meet and swap things. Um, I
think it was mail order. Oh yeah, okay, but when
you take a look at these clubs then and today,
what you described Emily doing is is pure bartering. Um.
(15:58):
But you know one of the big limitations of bartering, well,
two of the big limitations are geographic boundaries, right, which
which the Internet overcomes because you know, some guy in
Tacoma has something you need is willing to ship it,
and you have something he needs. Geographic boundaries gone, right,
But the timing thing is still a problem. So what
(16:19):
barter clubs and barter websites have come up with is, um,
if if the person doesn't have anything to give you, right,
then they can trade you in credits. Yeah. I didn't
know that was going on. That's kind of cool. That's money,
Uh yeah, in a way. No, that's currency. That's it.
Think about a dollar bill. It's a it's a credit,
(16:39):
it's a promissory note. It doesn't hold any inherent value. Yeah,
but only within that network is a currency. Like it's
not like you can take those credits out to McDonald
still say, no, totally, you can't, but it's still currency. Yeah, right,
So like within that barter network. It's still they're still
using currency. It's just so difficult to get past, you know,
the necessity for currency. That's a good point. Yeah, it's
(17:01):
a big shamnon. You were talking about the craft scene
being like huge and bartering, right, they love it. Marketing
is as well, like business barters, way more than I
ever realized. Yeah, I have a stat for you if
I may. Yeah. Yeah. In two thousand and eight, North
American companies, not even internationally, but North American companies bartered
(17:24):
twelve billion dollars in goods and services. Yeah, and apparently
that was partially a result of the recession, because in
two thousand one they did like seven point seven five billion.
But still it's a substantial amount of stuff that was traded,
either in the form of goods or services. Right, people
striking a deal like Chicos bail bonds will sponsor your
(17:46):
baseball team and they'll pay for your jerseys if you
put Chicos bail bonds on the back. Yes, you will eventually.
In the case of the yankees't you remember who their
sponsor was? In bad Newspayers Denny's. Was it really? I
just saw the other day and I'm like, huh Denny's.
They were a high profile team. Oh well, they got
a high profile sponsor. UM. We were talking about the recession,
(18:09):
UM accounting for an increase among businesses. One of the
great things about bartering is you it says you're cash
to pay down debt or to keep workers on the
payroll or the cash is always good for business. Yeah, Um,
So that's why corporations do it. People do it in
times of crisis, which was the case. Well, it's part
of the case right now. There's been a huge resurgence
(18:29):
in UM consumer bartering, right because of the economy. Yeah,
but UM in Argentina and I think two two thou nine,
their economy was really in shambles and they were bartering
clubs everywhere. Well. Yeah, in in places where there's natural disasters,
a lot of times, the first thing they will turn
to was bartering, at least in a in a temporary
(18:51):
sense until they can kind of get things restored, because
I don't know the end of the world. What's what's
that dollar bill going to do for you? You know?
I read almost that same phrase on a post collapse
blog of survival blog and the guy was rambling off
items that will be good for bartering. Dollar bill is
(19:11):
not among them, of course not. I R S. Josh.
Let's let's talk about that, because if you think, hey,
this is a great way to skirt taxes, I can
trade my haircut for my homemade soap all day long?
Am I outing myself? Now? Ask an auditors? Now? Yeah,
because you know you're supposed to report this stuff. Yeah. Um,
(19:33):
those barter clubs from the late seventies actually ruined it
for everybody. Um. Time was you could barter everything and
not pay a cent of taxes on it. But the
barter club that the artificial economy created by the barter
clubs reached about an estimated two hundred million dollars um
in size, and I R. S went, we want some
(19:55):
of that. So they reformed the tax code in and
came up with the ten B form Proceeds from broker
and barter exchange transactions and if you're bartering, you have
to both parties have to fill one of these out,
create like a an estimated market value of the goods
or services and pay it. Hey, you know when Emily
(20:18):
first brought that form home filled it out of it?
What is this you had another form. She said, Yeah,
you can't trade. You gotta pay the piper. And the
piper is the I R S. Yeah, it certainly is, Josh,
but that's not necessarily well that that's a bad thing.
But the I R S. You can also write stuff
off that you you have traded. Yeah, so it goes
(20:41):
the other way a little bit too, And we would
be remiss to not mention that. Yeah, um, you you
can right off as an expense something you trade because
it's value and it's lost and you didn't get any
money for it, which is how the tax systems set up.
If you're not getting any money for it, it's different
and stuff that you're getting money for. Well, and they
(21:02):
point out that if you get one of those trade credits,
you could donate that trade credit to a charity and
write that off if that charity will accept trade credit. Yeah,
I've never heard these trade credits. I can look into that.
It's money. I mean, is it a point value they
assign a wonder. Yeah, there's actually day it's worth this
(21:23):
many dollars. Well, one that I came across, dib space
um had something called Dibbitts and their trade credits, and
there were one dibots worth a dollar, So it's money
based on money in a bartering network. Well money, Did
we ever say that money inflation? That's one of the
downsides of of currency. We didn't say it, but go ahead,
(21:47):
Well yeah, I mean that's the big deal. Like you
buy a peck a bushel of peaches one year for
ten bucks, and the next year that might buy ten peaches.
That's the downside of money. Although I suppose I could
happen bartering too. They could just say, rough, peach crop
this year now, will only trade you this many for
your core. Yeah. That I would think relative value would
be affected by supplying demand. Yeah, I mean that makes sense.
(22:10):
I would think it wouldn't happen on such a widespread level, though.
I mean, think about how many people are affected by
the dollar bill and its fluctuations, right, Think about how
many people are affected by a local peach crop. And
that's actually one of the things that barter systems are
um so appealing to people these days. There's such a
movement towards local economies. Barter system can't be sustained by
(22:33):
a country of three million people, so basically everybody has
to split up. I read an essay about how um
secessionism could save the US and that if we don't
break up, we're in big trouble. Yeah, that any any
non authoritarian system of government can't be sustained or adequately
(22:53):
administered in populations over I think either three million or
thirty million. Yeah, it's pretty cool. As in the Utney
Reader the last month. Get that ought to check that out.
It was the one with Marge Simpson as Rosie the
river Y. Yeah, yeah, it's pretty cool. I'll check that out.
So we're done. I'm done. You got anything else except
for me? If you want to hear mention of Kyle McDonald,
(23:16):
the kid we mentioned in the house Swapping podcast a
little prematurely. I guess who traded a paper clip for
a house? He had to pay taxes on that, he
had to it, I'm sure, I hope. So maybe Corbyn
Burnson paid one. If you want to see a picture
of that kid, you can type in barter at the
search bar at how stuff works dot com and that
brings up, of course, listener a, Josh, I'm gonna call
(23:42):
this one of two eventual mafia letters that we got.
We got very many who knew by letters took means
broken thumbs. Yeah, sit in little boxes? Yeah? Who knew?
So many people are connected to the Mafia day A
lot of people have stories to tell. Yeah. I think
it's also like saying like whose name who his Native
(24:02):
American and him, Yeah, I do a little bit. I think.
Uh so we're going to read two of those, one
of them right now and one on the following episode.
And this is from Calvin. This is pretty interesting. Calvin
the Mafia as Yeah, Calvin the MAFIASA. I just listened
to the episode about the Mafia, and I have a
couple of things to say. Firstly, I am grossly disappointed
(24:23):
in both Josh and Chuck for talking about a Joe
Velichi and not once mentioning the greatest Simpson episode ever,
Homie the Clown. I was disappointed about this one, yeah,
in which Homer disguised this Krusty gets captured by Fat
Tony in the Springfield family and tried to convince them
that he is all different kinds of people, Joe Vlachi
being one of them. I didn't make that connection. I
(24:45):
remember He's like, I'm I'm not Homer, I'm Joe Vlachi,
Joe Lachi, the rat he's like something like that. He said,
if you did mention it, then shame on the editor
Jerry for removing it. So let's just go with that. Ye,
let's go with that one, Jerry, shame mind you boo. Also,
I thought you guys would be interested to hear some
hypotheses about why it is called the mafia. One says
(25:08):
that during the War of the Sicilian Vespers, a woman
found her daughter at the Vespers being raped by French
soldiers and then ran through the streets shouting mafia, mafia,
which is a dialectical translation of my daughter, my daughter,
my daughter, mafia. Did the mafia come to her rescue
(25:31):
or what? I don't know, that's just what he says, Sicilian, Okay,
I mean, I don't think he's making this up. It's
a theory, I'm sorry, hypothesis. The second hypothesis is also
a remnant of the occupation of Sicily by the French.
The word mafia might be an anagram for morta allah
Francia Italia, which translates into something like Italy longs for
(25:57):
the death of France. Yeah a f I A huh.
I don't know about that, but they both sound pretty plausible.
To me. So, I guess the word mafia doesn't mean
anything it's in a family name or anything like. I
don't know. I never really thought about the originally name.
We didn't cover that. So these are two hypothesis from Calvin.
He says both of these came from a book called
(26:18):
The Secret Society's Handbook by Michael Bradley. Might be complete Bologne,
because I'm not sure how reliable that book is, but
it's sure is interesting. I thought you might like it
very cool. Thank you who is that Calvin? Calvin the Mafiosa.
Of course, thank you Calvin the Mafiosa for writing in.
And um, we want to hear from you guys too,
so we would urge you to send us an email.
(26:40):
If you have something to trade, we want to hear
about it. Wrap it up spanking on the bottom and
send it to stuff podcast at how stuff works dot
com For moral on this and thousands of other topics.
Is it how stuff works dot com. To learn more
about the podcast, click on the podcast on in the
upper right corner of our homepage. The house Stuff Works
(27:03):
iPhone app has arrived. Download it today on iTunes. Brought
to you by the reinvented two thousand twelve camera. It's ready,
Are you
Stuff You Should Know News
Hosts And Creators
Chuck Bryant
Josh Clark
Show Links
AboutOrder Our BookStoreSYSK ArmyRSSPopular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
40s and Free Agents: NFL Draft Season
Daniel Jeremiah of Move the Sticks and Gregg Rosenthal of NFL Daily join forces to break down every team's needs this offseason.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.