Greece's barter economy - a sign of things to come?

pmbug

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In recent weeks, Theodoros Mavridis has bought fresh eggs, tsipourou (the local brandy: beware), fruit, olives, olive oil, jam, and soap. He has also had some legal advice, and enjoyed the services of an accountant to help fill in his tax return.

None of it has cost him a euro, because he had previously done a spot of electrical work – repairing a TV, sorting out a dodgy light – for some of the 800-odd members of a fast-growing exchange network in the port town of Volos, midway between Athens and Thessaloniki.

In return for his expert labour, Mavridis received a number of Local Alternative Units (known as tems in Greek) in his online network account. In return for the eggs, olive oil, tax advice and the rest, he transferred tems into other people's accounts.

"It's an easier, more direct way of exchanging goods and services," said Bernhardt Koppold, a German-born homeopathist and acupuncturist in Volos who is an active member of the network. "It's also a way of showing practical solidarity – of building relationships."

He had just treated Maria McCarthy, an English teacher who has lived and worked in the town for 20 years. The consultation was her first tem transaction, and she used one of the vouchers available for people who haven't yet, or can't, set up an online account.

"I already exchange directly with a couple of families, mainly English teaching for babysitting, and this is a great way to extend that," said McCarthy. "This is still young, but it's growing very quickly. Plainly, the more you use it the more useful to you it gets."
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http://www.guardian.co.uk/world/2012/mar/16/greece-on-breadline-cashless-currency?newsfeed=true

Clearly, such a terrorist network needs to be shut down by the internet police. /sarc
 

DCFusor

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Not sure I'd call that a barter situation exactly - looks like they just created their own currency instead, somewhat less personal. Cool, though. It's hard to expand pure barter past a certain size. This would run into issues too when it got big, but it should work as long as all the participants kind of agree on what constitutes one "tem".

And, if everybody agrees on some central repository of them. What would you do if some complete stranger comes to you and claims they have X "favors" owed them?

So you need some network of trust here. I've got to get Liars and Outliers I suppose to get Bruce's take on that.
 

swissaustrian

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Not sure I'd call that a barter situation exactly - looks like they just created their own currency instead, somewhat less personal. Cool, though. It's hard to expand pure barter past a certain size. This would run into issues too when it got big, but it should work as long as all the participants kind of agree on what constitutes one "tem".

And, if everybody agrees on some central repository of them. What would you do if some complete stranger comes to you and claims they have X "favors" owed them?

So you need some network of trust here. I've got to get Liars and Outliers I suppose to get Bruce's take on that.
Yes, barter networks usually create their own currency, so they can limit it's use to the network. In times of economic chaos, this is actually a good idea. Take e.g. bank holidays, a hyperinflation or some kind of economic martial law. When the ordinary methods of trade aren't available/severely restricted, people tend to develop alternative methods.
A pure barter economy without any medium of exchange is hard to imagine on a large scale - as you already said. However, modern means of communication could make barter a little more attractive: It's biggest disadvantage to money based trade (purchase) is information inefficiency, i.e. you have to find a bartering partner and a "price" (exchange ratio). With the internet, this problem has significantly shrunk.
 

pmbug

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* bump *

...
Meanwhile, Greeks are increasingly turning to alternative payment systems amid a scarcity of hard currency. The most established system is TEM, which is in its fifth year of existence. Here’s WSJ:
TEM—a sophisticated form of barter whose name is the Greek acronym for Local Alternative Unit—was founded in 2010 in the early months of Greece’s debt crisis with less than a dozen members. Now it includes dozens of participating local businesses that use the system to sell goods and services, including prepared food, haircuts, doctor visits, or even for renting an apartment.

One of the larger and more established alternative payment systems in Greece, TEM has given Greeks living under the strain of wage cuts and tax increases a supplementary way to trade. Instead of dealing with a physical currency, members have an online account that starts at zero when they join. They can opt to take payment for goods and services in TEM, and then use those to buy products from others.

On the network website, users can post ads on what they can offer and what they want. Mr. Papaioannou, for instance, accepts TEM as payment for the computer repairs he does and says he uses the alternate currency in transactions several times a week.

It is a localized version of what Greece might have to turn to if a tentative bailout agreement reached this week is derailed, or ultimately fails.
This is of course quite similar to the system former finance minister Yanis Varoufakis intended to create as part of a "cloak and dagger" parallel payments infrastructure he claims Alexis Tsipras pressed him to create as a contingency plan. And TEM isn’t the only system operating in Greece. The Journal goes on to list three additional schemes:
  • Ovolos: This alternative currency was founded in 2009 by a group of entrepreneurs in Patras, Greece’s third-largest urban area. Named after an ancient Greek currency, its membership is in the thousands. Unlike TEM, Ovolos covers the entire country.
  • Monada: This smaller program based in the city of Chania on the island of Crete was set up in 2011, and is one of several popping up on Greece’s islands. Every other Sunday, its registered members hold an open market where they can use the alternative currency.
  • Athens Time Bank: The Athens Time Bank was created in 2011 during the height of anti-austerity demonstrations in Athens’s central Syntagma Square. The unit of exchange is an individual’s time. Members earn a time unit for every hour they give to someone using their skills, which can include anything from psychotherapy sessions to a Spanish lesson.
This is all in addition to the classic barter system, wherein citizens simply trade goods and services directly and as we detailed late last month, many Greeks have found that transacting in clover, hay, and cheese is the most straightforward way of doing business in an economy that faces total collapse.
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http://www.zerohedge.com/news/2015-...ternative-currencies-parliament-votes-bailout
 

11C1P

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Glad you bumped the thread. That video about Greece towns using barter and alternative currency is very interesting.
 

Chigg

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If a store owner accepts these TEMs as payment for goods, how does he pay his venders to restock?
 

11C1P

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If a store owner accepts these TEMs as payment for goods, how does he pay his venders to restock?
I would have liked a more in depth story too. Personally I wasn't keen on the idea that everything is stored on a computer to keep track of who has what. Couple of problems with that, what happens if the computer gets fried, or the power goes out? Also the guy with the computer is wielding a LOT of power in that town, and what if someone else steals the computer? Still thought it was an interesting story though.
 
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