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PrepperNomics 107:  Bartering in the Post-Apocalyptic World

One of the things I like about writing for 3BY is that Salty doesn’t require that I always agree with him.  So naturally, my post on bartering comes up shortly after he has a post on guns and ammo as barter items.  My difference of opinion may not be what you are expecting, so please read on.

Barter makes sense in the absence of a functioning currency.  Currently we have a functioning currency, but in a SHTF scenario, perhaps we won’t.  To most people that seems pretty remote.  To not have a functioning currency, not only must the US dollar cease to function, but no other currency like the Yen or the Euro be available as a substitute.  On the other hand, preppers concern themselves with Low Probability Events.  Consequently, the subject of Barter comes up in prepper circles, based on the assumption that the US dollar and other currencies no longer function post-Armageddon.  The debate then turns to what goods would work as barter goods.

Personally, I have always felt that the goods you would want to trade would be whatever you had an excess of.  If things were so bad that cash no longer worked, you would want to trade for whatever you were short of, and pay in whatever you had an excess of.  That is barter.

The difficulty with a barter economy is that for anything to have value, you must find a person who needs it, and has something acceptable to you to trade.  With a functioning currency, half of that equation is taken care of, as money is virtually always acceptable for an exchange.  Barter is much less convenient than a functioning monetary system, because both sides must want whatever goods the other is willing to trade.

Middlemen are the only people in a position to really know value in a barter economy, and have the contacts to know who needs what.  That is because it is actually a lot of work to figure out values in terms where the trade is goods for goods, not goods for currency.

Transportation is also an issue.  You have to get the trade goods from where you have stored them, to the location your buyer wants them.  If things are so broken down that money no longer works, it is unlikely that transit systems, particularly fuel hungry trucks, will be operating.

As a result, our conditions for barter to be in use will consist of a SHTF event so severe that our monetary system is no longer functioning, transportation systems that are broken down, but there is enough need for, and supply of, goods that a trading system arises and there is enough accessible population that you can find a local market that can both supply goods you need, and provide a marketplace for the goods you wish to sell.  This is a somewhat restrictive set of conditions.  😊

Categories

If a barter economy does begin to develop, what do you barter?  If you recall our Supply Categories, you’ll find that despite your best efforts, you have an excess supply of some items vs. other items where you come up short.  For instance, you may have planned for a year long event, but you find your estimates were off, and you’ll run out of food in 10 months.  However, you have an 18 month supply of hygiene items.  The reason for this is because no matter how hard you try, your estimation of how much you need will be a bit off, in some cases too high, and other cases too low.

A hypothetical barter transaction you would like to make is to pay for food with hygiene items.  You need to find someone who has the opposite situation.  Alternatively, you could find someone with food, learn what they needed and perhaps trade your hygiene supplies for whatever the party with extra food wanted.  Without a currency this rapidly becomes time consuming at best.  This is really inconvenient, so there will be tremendous pressure to implement a currency in our post-apocalyptic economy.

Precious Metals

Some suggest gold and silver as a solution, but gold and silver have functioned as currencies in the past, so using gold and silver, particularly coins, is simply returning to a traditional currency, not barter.  I’ve previously written about Precious Metals.  The only point I wish to make here is that trading precious metals is not true barter because barter is trading goods for goods, not trading for a currency and precious metals in this example are simply substitution precious metals for dollars.

As I suggested in the Precious Metals post, storing precious metals for use in a SHTF scenario is risky because the use of precious metals as a currency might not develop, and the goods you would want to acquire might actually be cheaper today than the precious metals, making purchase of goods now the better plan.

Ammunition

In some prepper novels, ammunition gets used first as a barter item, and evolves into a pseudo-currency.  Ammunition does have the advantage of being durable and relatively compact, making transportation to market easy, but there is no guarantee that a barter economy would develop or that ammunition would become a substitute currency.  There is also the concern of the ammunition being used against you.  The good news about ammunition is that if a new currency were to appear and barter was not needed, one could always just sell the ammunition for the new currency.  The same is true if SHTF never happens.

The ammunition can be sold or left in a Prepper Estate.

Conclusion

Barter is a consideration for preppers, but predicting the type of disaster that will lead to a barter economy is a challenge.  Even if we experience that type of event, predicting what will make an effective barter good is another challenge, so you are building predictions on top of predictions when you start to set aside something specifically for barter.  The better plan is to prep with the supplies you need, and plan on barter simply to balance things out, trading excesses in order to acquire shortage goods.

So how does this depart from Salty’s post?  I am saying that you barter what you have an excess of, so for bartering guns and ammo to work, as Salty suggests, you must have an excess of guns and ammo.  I suspect Salty may have an excess, but there is really no way to tell until you find out if life in Dystopia requires more or less than you planned.  As with all of our prepper goods a specific prepper group may have an excess of guns and ammo, or a shortage.  For barter to work somebody with an excess has to find someone with a shortage.

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Read today’s post!

PrepperMed 101: The Eyes Have It! – Don’t Lose Sight of These Three Things

 

Paranoid Prepper

One Comment

  1. You’re quite right that barter needs both: someone with a specific need/want AND someone with a surplus of that item. The odds on that ideal mix are slim. That’s why a currency is so much more useful. It’s really iffy that you’ll manage to stash a surplus of what someone else will want.

    Per ammo-as-currency, I could easily see where firearms themselves might not be scarce. With the anticipated “die off” or salvaging, there might be a fair number of guns in circulation. Ammo, however, is a consumable. The need to feed all those guns presents a market demand.

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