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Barter and Economic Disintegration

Caroline Humphrey
Man
New Series, Vol. 20, No. 1 (Mar., 1985), pp. 48-72
DOI: 10.2307/2802221
Stable URL: http://www.jstor.org/stable/2802221
Page Count: 25
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Barter and Economic Disintegration
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Abstract

The mainstream economists' view that barter should be seen as a `natural' phenomenon of human nature and as the origin of money is rejected. Barter occurs in specific socio-economic conditions which may obtain also in economies which know money. When there is a very low supply of currency, money may cease to function as an index of value for all goods and itself become an item bartered. This is likely to occur when small discrete social groups wish to maintain autonomy. Unlike money payment, which requires a further transaction before value is realised, barter satisfies demand immediately and is of its nature discontinuous. As with car trade-ins in our economy barter occurs when people cannot afford to keep money, and it becomes a system when society is atomised to the extent that people do not exploit the variations in exchange ratios between different communities. Using the case of the Lhomi of north-east Nepal, it is shown that althoug the exchange of common produce, as opposed to rare valuables, is most likely to approximate to a notional 'equilibrium price', the practice of barter with no established measures of weight and volume means that there can be no underlying index of value/numeraire. Each transaction exists virtually on its own. Thus, although barter is an egalitarian mode, it contains no protection against changing exchange ratios which may harm one partner. Barter tends to take place between people who know one another, because it is only by the establishment of customary times and places for exchange that the costs of searching for partners, waiting etc. are avoided. Delayed barter, which often occurs with valuables, requires non-economic means of ensuring repayment, but the ritualised trade-partnerships which the Lhomi employ are self-limiting: restricted relations cut traders off from the wide, unpredictable world of the capitalist end sale. Business often fails and the traders suffer.

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