In my view, one hallmark of a functioning society that provides and affords the most opportunity for its citizens is a currency supported by both the full faith and credit of the government or tied to tangible reserves (e.g., precious metal). Without a viable currency, opportunities for self-promotion and growth are limited to those with specific commodities or services that are easily exchanged on an open market -- not to mention the impossibility of regulating such a system and that small problem of collecting tax revenue. In the absence of a viable currency, bartering is the oldest form of trade and is the basic economic construct from which modern currency models were derived -- currency as economic common denominator. In Russia at the moment, a regression to such barter is catching hold according to a recent New York Times story.
The article explains how bartering is becoming a standard form of commerce in Russia once again. Advertisements are even "beginning to appear in newspapers and online, like one that offered '2,500,000 rubles' worth of premium underwear for any automobile," and another promising "lumber in Krasnoyarsk for food or medicine. A crane manufacturer in Yekaterinburg is paying its debtors with excavators." Bartering is nothing new in Russia. In the recent past, such transactions "accounted for an astonishing 50 percent of sales for midsize enterprises and 75 percent for large ones". So far, The Times notes that the percentage of barter transactions is still in the single digits. But it's rising, even among larger businesses.
Consider the case of a "Hyundai factory in Taganrog" which "rolled out a barter promotion on its Web site, offering to trade vehicles for 'raw materials,' 'high-tech equipment' or 'other liquid goods,' including finished products of various branches of industry". While this type of behavior is no doubt a result of the desperate situation many companies are finding themselves in, perhaps it's not such a bad model for US companies to follow. Chrysler could, in theory, turn to barter as a last ditch form of Spend Management to stay in business given the amount of inventory sitting outside of plants and at dealers. If only the feds and the UAW would allow it ...
On a more serious note, what do you think? Is bartering a last ditch form of Spend Management?