Gains from trade

Greg Beato discusses the success of barter in the current economy.  Barter's a great way to expand the effective money supply when velocity falls.  It's also, at least until your operation gets big enough to notice, a swell way to keep from paying taxes.

(And why should you?  If it's an even swap, your net asset position can't have changed in an accounting sense.)

Barter is, of course, inefficient and ponderous--more of a hobby than a means to build up a modern economy.  Nonetheless, as taxes go up and velocity (presumably) stays low, I expect we'll see more of it.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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