As is similar to brokerage houses, a barter company facilitates the exchange of goods or services between member companies within a ‘club’, allowing members to acquire goods and services by proving payment through the barter organisation of which a the members accept a payment through their membership account. This is called a Trade Dollar and can only be spent if a business is part of the said ‘club’.
Member companies are required to sign a barter agreement with the barter company as a condition of their membership. In turn, the barter company provides each member with the current levels of supply and demand for each members’ goods or services which can be purchased or sold in the system.
These transactions are mediated by barter authorities on behalf of the member companies. This is especially the case with Trade Gate as it carefully monitors trading behaviour. The barter member companies can then acquire their desired goods or services from another member company. Each member company pays an annual membership and transaction fees and the commission charge is based on an interest fee calculated on the transaction value, nominated in the contract. By doing things this way it is the only cash component paid to settle transactions, enabling sales and purchases to be made with excess capacity or surplus inventory. This conserves a lot of cash.
Earliest Recorded Barter Ran Organisations
The Owenite socialists in Britain and the United States in the 1830s were the first to attempt to organise barter exchanges. Owenism developed the “theory of equitable exchange” as a critique of the exploitative wage relationship between capitalists and various labourer (worker equivalents) equivalents, at which previously all profit was mainly accrued to the capitalist. To counteract the uneven playing field between employers and the employed, they proposed “schemes of labour notes based on labour time, thus institutionalising The Owenite’s demand. This meant that human labour, not money, was to be made the standard of value. This alternate currency eliminated price variability between markets, as well as the role of merchants who bought low i.e. labour hire and then sold on at higher rate. Basically, forming what we know as Time Banking.
After all, as bank notes were basically an IOU, determined by a government’s reserve value, left many economic conditions able to play a significant force in its value. It was this promise to pay the bearer of such a piece of paper (bank note) that many different attempts were made to regulate the value and somehow keep it upheld.
An alternate currency, denominated in labour time, would help prevent profit taking by middlemen, as all goods or services exchanged would be priced only in terms of the amount of labour that went into them as expressed in the maxim. This is the “Cost limit of the price”, indicating a prescribed value or known as a labour theory of value. This maintained that only the compensation for labour (or for its product) could only be an equivalent amount of labour (or a product embodying an equivalent amount). This helped standardise a set value and assisted in avoiding inflationary pressures.
Today we see barter or trade organisations still growing the world over, as it is still an extremely effective way of doing business. Trade Gate has a system in place, that protects the member through potential risks. We are here to assist and have in place conditions along with terms and conditions that make doing business through us an enjoyable experience.