Will I help you marry a wife and take her to bed?

There is an African proverb that states that you cannot marry a wife for your son and teach him how to take her to bed. Poignant when I was reading an article on remittances and their contribution to economic growth.

Adultery could be forgiven when you're the piper.

Credit: 10 Gebot (Lucas Cranach d A) by Lucas Cranach the Elder via Wikimedia Commons

A lot of persons will tell you that remittances from overseas can lead to economic growth for their country. But, research has found that it is not true. Rather than remittances fueling economic growth, they’d rather reduce it by creating a dependence on remittances which occasions the recipients being less obliged to look for work. When the remittances fail to come, the government feels the pinch of the lost foreign exchange.

Creating an avenue for money from abroad to enter the country is fine and good, especially for poor families who have relatives abroad. What the study found was that these money were most times sent to fuel consumption, such as importing goods from abroad or buying land for living, and not to be invested in any project that could significantly improve the human or technological capital of the receiving countries.

If I help you to marry, don’t expect me to teach you how to take her to bed.

You can read the article yourself on the world economic forum.

The sharing economy, an exchange systems that is making barter popular.

The global financial crisis is a bug that has left no country unscathed. Most businesses have innovated different ways to surviving the crisis. In order to reduce the cost of excess inventory and improve cash flow, some have taken to barter. Firms who make use of barter as a form of exchange cut across the entire business world. From libraries ready to barter old books for booze, to fashion houses who want to swap your old clothes for equalized items. If one has to do a count the list is immense.

The sharing economy: new hands trying out old tricks. Flickr.com/dachalan

Barter cannot replace money. Barter cannot be as efficient for our modern world, yet she does have her advantages. Mathew Winn, the owner of Molasses knows that too well, so he is ready to trade your used books for coffee . Or even, for more books. Or take the tale of another consumer, Johanna Lassonczyk, 31, who will be turning her back on the fashion industry. Interviewed by Spiegel Online Magazine, she has resorted to swapping things instead of buying new clothes because the fashion industry is in pretty bad shape . She is amongst many Germans who have started attending swap parties to exchange the old stuff in her closet with other items.

Nationalities are not left out of the trend. Threatened by American sanctions since June of 2012, Iranian companies, cash strapped and threatened by the sanctions, have resorted to bartering their produce for food. The News, a Pakistani online newspaper, reports that cash-strapped Pakistan Steel Mills (PSM) and the Government Trading Corporation (GTC) of Iran have, in principle, agreed to arrange barter trade between themselves to make their survival possible.

Social status is attached to the trend.

The idea might be great, a brain child to the green movement that is presently sweeping the corporate world after years of hiatus. It offers poor people, especially the younger generation, the opportunity to buy goods where their disposable income cannot be adequate, and the opportunity to enhance their social status. Some might call it the sharing economy. People share living space, clothing and cars. It might be a new form of consumption, a response to troubled financial economies. Only time will tell if the trend will sustain its current momentum.

The platform that makes all these possible is the Internet. Barter exchanges who serve several roles, especially that of connecting people with similar wants and needs, are springing up on the Internet. Thousands of businesses are availing themselves of this opportunity to improve their cash flow, acquire clients who usually would not have thought of trying out their products, and those who are not price sensitive because money is not at stake, but their wants and the equivalent goods they can exchange it for. The Internet makes the sharing economy profitable. It has been dubbed “the relationship economy,” driven by the principle of reciprocity. In Canada, the Trade school , a school that is based on barter, catering to people who love practical wisdom, mutual respect and the social nature of exchange, just launched on January 19 in Vancouver. Rather than ask for money, teachers ask for items from their students. The new sharing economy is all about giving back to the society, to your community, and has been enhanced by the spate of Web 2.0 social networking sites that have sharing as their main themes.

Not limited to National borders.

Bartering is not limited to national borders. Some exchanges cater to international clientele, like the Ormita Commerce Network. Although headquartered in Italy, its network of 220,000 members operates in many major cities around the world. Tough times call for tougher measures. If a business has enough resources, the lack of money should not hinder it from carrying out production. It should only be a transactional problem. Networks like Ormita reduce those costs.

Iranian companies like the GTC which was mentioned earlier have seen security in bartering due to factors which lie in the realm of politics and not economics. The economic sanctions from the United States has bitten her hard that International trade in money currencies has become very difficult.

Grecians have turned to the Tem as barter currency in lieu of the Euro to stave off hunger.

Money. Everyone wants lots of money. Some say money makes the world go round. We sometimes wonder if there will be something better than money for exchanging goods and services. Before money there was barter, the direct exchange of one good for another without the use of money. Barter works well when your economy is simplistic, without much specialization and has few goods to trade in. Therefore, when a modern country decides it wants to go back to barter, there is something wrong.

The economy can function with a little less money. Flickr.com/arimoore

True for Greece. She has been struggling with its worst economic crisis in modern times. It is reported that her citizens have lost up to 40% of their disposable incomes in order to qualify for international aid. Grecians are turning to barter as an alternative currency. In cities like Athens and the suburbs, the barter economy is gaining ground. One such currency is known as the Tem, a novel barter exchange system that was begun in the town of Volos, as a way for Grecians to deal with intense austerity.

It is all about the need to survive. The euro has become scarce commodity, available only for the privileged few. People do not bother carrying money at all ; they’d rather exchange second-hand clothes, electrical equipment and homemade jams through the barter system. To that spirit of exchange, one can add the drive to stand together, to go through the hard times and survive together.

The Tem is not the only alternative that exists; it is just the brainchild. Others can be found in other towns. It is a story of a country whose infrastructures are collapsing. It is not a rejection of the Euro, but for the fight to survive due to acute Euro shortages. The people have very few or no options. They have to live their lives and hope for the best. Although the barter system might be ineffective, what is more important to the people is the ability to exchange on less. Panos Skotiniotis, the mayor of Volos, is in favor of the Tem. “We are all supporting alternatives that help alleviate the crisis’ economic and social consequences,” he was reported to have said to the Guardian. The Tem won’t replace the Euro ever, but at least, for those who are financially weak and the aged, it is a viable alternative.

Greece has given up the fight.

Unemployment rate is high. It recently hit an European record of 26%, surpassing even Spain. The people are impoverished. Lost jobs translate to lost income. Insecurity, both economic and political, is uppermost in people’s mind. Disillusion reigns everywhere. The financial system has failed. Greece has surrendered to its economic crisis and has given up the will to fight back. Else, why would the people be driven to barter? The message is clear. The system has failed the people.

Even with the use of barter currencies like the Tem, it is doubtful if people will be able to dodge taxes. The informal bartering economy needs platforms in order for wants to meet need, or to satisfy double coincidence of wants. The need for a barter network requires bookkeeping and record keeping . There is also the need for a common measure of value. One Tem is reported to be equal to one Euro.

The Tem is the story of the town of Volos, a suburb 200 miles north of Athens, reputed for its tobacco. The town of Volos used to be a trading route that connected Greece to the Middle East before Syria’s ascent into Civil War. This is the story of the failure of government when it cannot fulfill its obligations and how necessity has become the platform for innovation and creativity. No matter what happens, when currencies fail and the system collapses, man has always found a way to survive, even if it means going back to the past.