
Trading Meat for Tires as Bartering Economy Grows in Greece - Mz
http://www.nytimes.com/2015/09/22/business/international/trading-meat-for-tires-as-bartering-economy-grows-in-greece.html
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ChuckMcM
This is an interesting side effect of the capital controls. It reminds people
once again that currency is really just a stand-in for goods and services
produced in an economy. I particularly liked that generic barter (like time
for time) was seen as problematic with this quote : _" But many of those
systems were plagued by inefficiencies. Time banks discovered that one unit of
a doctor’s time was more valuable than a unit of a babysitter’s, complicating
trades."_

All of which just seems to highlight that Greece's monetary policy is out of
whack, not its basic economy. It would be interesting to see a two currency
economic model, where one currency was priced by durable goods and services,
and the other by government services.

The exchange rate should give an interesting window into where the challenges
are.

~~~
Mz
The online barter systems seem to be de facto creating an alternate currency.
IIRC, the one profiled in the article uses "points" that are the equivalent of
Euros (scanning, I can't verify this atm, but I read more than one article
before submitting this one, so maybe I read it elsewhere). So if you have 600
points in your online account, you have the equivalent of 600 Euros to work
with.

I think it isn't Greece's monetary policy that is out of whack. I haven't
really studied it, but my impression from casual reading is that the economy
is being crushed by things like high benefits packages for government workers.
So when you engage in barter, you side step that. You trade THIS thing for
THAT and there is no cost tacked on for putting money into a retirement
account or paying for disability insurance etc. You just need tires and need
food or you have meat and need tires, and you make the trade to meet your
needs in the here and now and let tomorrow worry about itself, thus you don't
reduce the value in the here and now of what you traded by setting aside one
of your four tires "in case something happens" and driving on three good tires
and one bad or whatever. (Trying to come up with a goods based equivalent of
the overhead of retirement and so on benefits.)

Anyway, I thought it was neat that a) barter is being facilitated in part by
online services b) those services are engaging in some of the same practices
PayPal engages in to make sure it is secure and c) it is de facto creating a
virtual currency without any intent to create currency. In fact, the intent is
to side step the need for currency. Nonetheless, the tracking of points that
you can spend is the essence of a currency. The single biggest real value
money has is it lubricates trade by creating something universally accepted so
you don't have to ask dozens of people if they will take Thing You Have in
exchange for Thing You Need. You can just sell it to Person Who Needs It and
then turn around and buy what you need.

~~~
LoSboccacc
D) evading sales tax

~~~
wutangson1
This.

>"criminal scum trying to screw the government out of tax revenue." Umm, so
you feel the same way about American Colonists with that whole Boston Tea
Party thing, right?

~~~
LoSboccacc
well there was a war about that and winners decided it was fine :D

we'll know how this play out in the next decades.

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kfk
__“Greeks are aware there are devastating consequences of being in a single
currency, like capital controls,” __

Then they are aware of the wrong thing. Capital controls are not the issue. My
guess is that without some form of control capitals would leave the country
making things even worst. Of course they should get worst, capital control is
BAD, but it serves a purpose. Bartering is working because people are trading
existing assets. It won 't work when it comes to buy those goods from other
countries, which is the real issue Greece has. Greece could stop paying debts
and use feta cheese as currency and it would be great, if they could produce
all they need without imports. As a matter of fact, they can't, thus they have
to deal with other countries, thus they have to produce things people want to
buy and that's the issue - Greece does not produce enough stuff that people
buy to cover its expenses.

~~~
gaspar
As long as the strong countries (e.g. Germany) control the value of Euro then
countries like the size of Greece will be always in trouble. I am Greek and
the biggest mistake that we made was to enter the Eurozone. Euro is good only
for very strong countries, but even those countries can have problems
sometimes. A very good example is Finland and Sweden. The former has problems
because of Euro but the latter thrives because they control their currency.
And Greece may not produce cars for example, but our agriculture is strong.
Because of the globalization though every country nowadays relies on other
countries. See for example Iran's problems because of the sanctions. Iran is
huge compare to Greece and they don't even have to import gas, but their
economy on the other hand is weak.

~~~
Zirro
"A very good example is Finland and Sweden. The former has problems because of
Euro but the latter thrives because they control their currency."

There are several reasons for this - many of which are likely more important
than the Euro - such as Finland having relied mainly on the declining paper
industry and Nokia for exports while Swedish exports are more diverse.

~~~
zurn
That's the beauty of having your own floating currency though. Independent of
what the problem is, your trade balance evens out automatically. If a
country's forestry exports tank, imports will become more expensive and
exports will become more competitive though currency depreciation. And people
will eat more domestic cheese vs imported, stimulating domestic demand.

~~~
samstave
Aside from going to school for economics, what do I read to grok this concept
much better?

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cjensen
Considering the habitual non-reporting of income that has been present in the
Greek economy, my first thought is this is just another way to buy and sell
stuff while avoiding VAT taxes.

Depressing, if true. Are there any signs that the Greeks are learning to pay
taxes as a patriotic duty to enable the supportive government they have come
to appreciate?

~~~
drzaiusapelord
Honest question: how do you teach a corrupt society to start paying taxes? The
economy there works with the assumption that your tax load is light, so things
like rents and price of goods reflect that. It would be difficult for people
to go from paying 10% tax to a Eurozone typical 44% tax overnight. The economy
would collapse instantly.

I supposed you can slowly bring it in, but how? Who has the political capital?
And if you do how long would it take to do this safely without hurting the
already damaged economy? A decade perhaps? Two?

I don't envy the policy makers there right now. The people don't want to be
responsible, at least a majority considering how easily Syriza keeps winning
and more moderate parties keep losing. Ironically, if they want low taxes they
should shoot for a low regulatory, small government, small social services US-
style model instead of the welfare state Euro model they're aiming for. Yeah,
Germany and France can get way with it because not only are these countries
incredibly wealthy, but the people there actually pay their taxes. You can't
have Somalian tax loads and French lifestyles.

~~~
elorant
_Honest question: how do you teach a corrupt society to start paying taxes?_

As a Greek citizen I can tell you that the general sentiment here is that the
state has to show that they respect taxpayers' money. Which among other things
means that the government will genuinely try to fight corruption (this hasn’t
happened so far), red tape will be significantly reduced, corrupted public
servants will go to jail and their properties will be confiscated etc. There
is a huge mistrust between citizens and public sector and this up to a point
motivates people to not pay what they should.

Of course from a certain perspective this can be perceived as a poor excuse to
justify tax avoidance but as always the truth lies in the middle. In Greece
there is no sentiment for common good, each one is on his own and that
reflects in the way we perceive our obligations to the country. We’ll pay up
to the point that we’ll have no problem with the law. If tax laws are not too
strict, which was the case up to a few years ago, then people will look the
other way.

Fortunately, the memorandum is forcing the government to take certain steps in
solving many of those issues. Of course it will take time, but the path has
been paved.

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greggarious
So, when stocking my bunker, what should I put in there that will have high
barter potential?

~~~
ChuckMcM
Traditionally? Alcohol and Cigarettes. Although I think if you put an alchohol
still in your bunker then you'd basically be able to print (pour?) your own
currency over the long haul.

~~~
daemin
Yep, one of my friends is learning to brew beer, distil spirits, and farm his
own food, so he'll be set for when the zombie apocalypse occurs.

------
tormeh
>analysts said new instability could reappear if Greece cannot carry out
structural reforms demanded by its lenders.

The sad thing is that this is basically unavoidable. The Greek bureaucracy is
so corrupt it's outside the reach of the central government. Greek politicians
couldn't change the system if they tried, which they won't, since they too are
corrupt.

The orderly countries that are Greece's creditors have limited understanding
of the Greek government's thorough corruption, or at least that was once true;
now I think they are just kicking the can down the road until the next
election. Some day we will have to write off Greece's debt. The Greek
government will never pay back, unless they can do so on the back of the poor
and those without political influence, which is of course what they're trying
to do right now.

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civilian
This kind of feels like an opportunity to use bitcoin or another digital
currency, doesn't it?

~~~
riskneural
All the disadvantages of the Euro - low inflation, no control over interest
rates - with extreme volatility of demand thrown in?

~~~
aianus
Except, you know, Bitcoin is actually liquid and Greek EUR deposits are not.
You can send $1 million in Bitcoin outside the country and buy an apartment
somewhere stable or a stack of gold bullion. Not so with Greek EUR deposits.

Not to mention EUR deposits in screwed up countries have volatility that puts
Bitcoin to shame: [http://www.rt.com/business/cyprus-crisis-bailout-
deposit-631...](http://www.rt.com/business/cyprus-crisis-bailout-deposit-631/)

~~~
riskneural
[http://www.newsbtc.com/2015/05/14/increased-liquidity-on-
bit...](http://www.newsbtc.com/2015/05/14/increased-liquidity-on-bitcoin-
exchanges-thanks-to-alphapoint/)

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uno22
My perspective on tax: "Tax is the cost of using money (printed) by the
government"

If the structure of using money breaks down, then it boils to trust, which the
barter system adequately provides. The problem, now boils down to the
quantification of barter units. Maybe time will solve that.

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worik
paywalled

