the new barter economy

FT columnist Gillian Tett explains, very well and concisely, that the ‘free’ services that internet companies provide in exchange for our personal data is the age-old system of barter. This system is difficult for economists to understand, because prices, measured in money, are absent.

It is … fair to say that our leaders, laws and economic models are not set up to cope with a world where barter is much more than a historical curiosity. Economists, for example, do not have any real way to include barter in their view of the economy, since they tend to measure everything according to price. “Free” items, such as apps or data exchanges, are largely ignored in the data on gross domestic product. Lawyers do not know how to cope with barter when it comes to discussing issues of antitrust or the abuse of monopoly power, since the US concept of antitrust and collusion presumes that the way to measure consumer exploitation is to see whether they have been charged excess prices — as measured with money. ….

For now we are left in limbo: our laws and models assume we have a money-based world; but our mobile phones and laptops operate with barter trades we barely understand. If nothing else, this shows that it is time to take a broader and, dare I say it, anthropological vision of the economy.

Gillian Tett, “How Big Tech brought back the barter economy“, Financial Times, 19 April 2018 (gated paywall).

There is much more at the link, in the full column.

Ms Tett (born 1967) has a Cambridge University PhD in social anthropology. She joined the Financial Times in 1993 and now serves as its US managing editor. In 2014, she was the first recipient of the Royal Anthropological Institute Marsh Award.

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