The Impact of Money-Free Computer Assisted Barter Systems - PowerPoint PPT Presentation

About This Presentation
Title:

The Impact of Money-Free Computer Assisted Barter Systems

Description:

Enable people to trade goods and services without using money ... 1972 Pepsi for Vodka. Children. Baseball Cards. Toys. Turn theory into practice ... – PowerPoint PPT presentation

Number of Views:51
Avg rating:3.0/5.0

less

Transcript and Presenter's Notes

Title: The Impact of Money-Free Computer Assisted Barter Systems


1
The Impact of Money-Free Computer Assisted Barter
Systems
  • Article By David L. Parnas
  • Presented By John D. Donath
  • March 26, 2004

2
What are Computer Assisted Barter Systems (CABS)?
  • Enable people to trade goods and services without
    using money
  • Can help eliminate the ills of society associated
    with a monetary economy

3
What is Money?
  • Enables people to exchange goods and services
    without a double coincidence of needs.
  • A way to store wealth (not really)

4
Problems with Money
  • A persons valuation of goods and services is
    subjective (Buyer or Seller Surplus)
  • I would like to sell my car for 100, and a buyer
    is willing buy it for 150, one of us will be
    cheated
  • Exchanges that may take place with barter may not
    take place because of prices the market places on
    items.
  • Leads to idleness of resources (unemployment)

5
Problems with Money
  • Inflation (large money supply)
  • Money loses its value over time
  • Tight money supply
  • Prevents businesses from having the liquidity
    they need to manufacture and circulate goods

6
Problems with Money
  • Trade imbalance
  • People who produce more than they consume have
    the impression that they are getting richer
  • People who consume more than they produce have
    the impression that they are getting poorer
  • Neither of these is true (the opposite is in fact
    the case when measured in resources)

7
Problems with Money
  • Uses a Scalar value to represent a Vector
  • A persons gain or loss from a deal should be
    measured in all the resources involved, not just
    one value (doing so causes a loss of
    information).
  • I worked for 5 hours and got paid 100.00
  • I worked for 5 hours and got a turkey sandwich,
    soda, a night at the movies, and 10 gallons of gas

8
Using Barter
  • Eliminates the sellers/buyers surplus
  • Eliminates inflation/tight money supply
  • Eliminates trade imbalance
  • A person knows exactly what (s)he is getting in
    return for sacrificed resources

9
Saving with Barter
  • Barter enables you to trade not just for
    immediate goods and services, but for future
    goods and services as well (similar to a futures
    contract)
  • No Inflation/loss of value
  • Eliminates risk of lending/borrowing in order to
    produce a good
  • People are forced to plan for savings by
    considering what they will need
  • Insurance will help reduce any risks associated
    with the unknown future

10
Foreign Trade
  • Eliminates the risk of trade deficits between
    countries
  • Eliminates the problem of concluding contracts
    between countries where multiple, fluctuating
    currencies are involved

11
Technical Issues
  • In 1985, Parnas, 10 students built a CABS system
    as part of a course.
  • Technology feasible to run on centralized or
    personal computers
  • (Internet makes this even easier)

12
Existing Barter Systems
  • Ebarter.ca
  • Recipco.com
  • Onecer.net
  • Barteryourservices.com

13
Has Barter been used?
  • Heavy inflationary periods
  • Germany early 1920s
  • Hungary 1946
  • Unstable times
  • No trust in government certifying money
  • People bought jewels and other stores of value
  • Rationing
  • Money not enough to meet demand for resource

14
Has Barter been used?
  • Recession (tight money supply)
  • People did not have liquidity necessary to pay
    for goods and services with money
  • 1935 Mosanto sold saccharine to China in return
    for Mackerel
  • Barter Theater in Virginia, performances for food

15
Has Barter been used?
  • International Trade
  • Avoid Currency Fluctuations
  • 2000 Thailand sold Rice to South Africa in return
    for Cattle
  • 1972 Pepsi for Vodka
  • Children
  • Baseball Cards
  • Toys

16
Turn theory into practice
  • All new technologies come with problems that need
    to be solved
  • Electrical theory
  • Generation (Power Plant)
  • Delivery (Power Grid)
  • Application (Light Bulb)

17
Turn theory into practice
  • Phase in CABS gradually
  • Enforcement of standards
  • Maintain pseudo-currencies to buy bags of market
    goods
  • Food certificates
  • Stationary certificates

18
Turn theory into practice
  • Insurance to reduce risk and enforce quality
  • Taxation for shared needs
  • People will view taxes not as a burden, but
    rather as their share of purchasing public goods
    and services

19
Effect of CABS
  • Reduce unemployment
  • Increase liquidity
  • Decrease hoarding of resources
  • Allow people to better plan for future
  • Insure that goods that are needed will be
    produced
  • Maintain relative values of goods

20
Effect of CABS
  • Wealth measured in resources, not money
  • Reduction of Poverty

21
Analysis
  • Parnas not the first to see illness of society
    due to wealth
  • Karl Marx advocated elimination of money through
    Communism

22
Marx vs. Parnas
  • Communist Manifesto
  • Violent overthrow of existing system
  • Government enforcement of moneyless system
  • Central planning of consumption
  • All people have same wealth
  • Bartering systems
  • Gradual and peaceful development
  • Phased in due to peoples desire for efficiency
    in business
  • Rules of supply and demand set values of goods
  • Differences still exist between people
    controlling more/less resources

23
Conclusions
  • Like any revolutionary idea, sounds good in
    theory
  • Human nature is to simplify matters to a bottom
    line
  • E-bay has been more successful than any of the
    online bartering systems
  • It is hard to eliminate a habit that has existed
    and controlled people for thousands of years

24
Conclusions
  • Article not technical, but like most of Parnass
    articles, pioneering with new ideas that have
    some impact on the Computer Industry
  • People should be encouraged to barter more
  • Tax incentives
  • Promotion through advertisements

25
References
Parnas, David L., Impact of Money-Free Computer
Assisted Barter Systems. Shore, John.
Introduction to Impact of Money-Free Computer
Assisted Barter Systems. Marx, Karl and Engels,
Friedrich. The Communist Manifesto. www.eBarter.c
om History of Barter.
Write a Comment
User Comments (0)
About PowerShow.com