Past readers of this blog may recall my reference to Rushkoff’s book Life Inc. and how this book basically discusses the extraction of value from communities to a centralized location – such as a bank or corporation not based in the resident community. Life Inc. basically proposes decentralized currency which allows for peer-to-peer exchange of value. In simplest terms this is bartering of products and services among individuals within a community.

While reading through Rushkoff’s blog archive I found the following video discussing decentralized currency – the video is a little over seven minutes, but worth watching in its entirety. The last third of the video focuses on Rushkoff and his theories on moving value exchange to the community level. Watch the video at Rushkoff’s article titled “Wall Street Journal on Local Currency.”

Decentralized Currency
I find decentralized currency to be really interesting as there is a strong barter culture on Cape Cod. Prior to moving to the Cape I hadn’t experienced bartering before – but it seems to be pretty strong here. In addition, I believe the current recession has pushed this trend upward – as individuals and businesses cannot afford services they seek alternatives such as bartering their services in exchange for something they may require.

Here’s an example. Consider the would-be entrepreneur with a great idea who doesn’t have the funding due to a loss of job or reduced income. One path could be to hold off on the dream and potential opportunity to wait for a better time. The other is to find members in your community who want to see you succeed and would be willing to barter services to get you up and running.

To start your business, let’s say an accounting firm, you may seek out an attorney to set up your business structure – LLC, S Corporation, C Corporation, etc. but may not have the funding to do so. The entrepreneur could approach the attorney and in exchange for establishing the business entity, offer accounting services in trade.

How To Go About Bartering
So how does one go about bartering? Just ask. Approach the person with the service you desire – and request a barter arrangement.

The worst they can say is no. At a minimum it will get the dialogue going in a new direction. Consider the worst does happen and they do say no. You can ask another, and then another – you are bound to find someone who is of like mind and interested in pursuing this type of value exchange.

Why Would People Barter?
Individuals and businesses exchange non-monetary value for a number of reasons. One possible reason is that they may be experiencing a slow time themselves and are just interested in sinking their teeth into a project. Another possibility is that the individual you are bartering with may just want to see you succeed. Many business owners have started in the same exact place you have – working to build a reputation and a solid business with little or no funding. These “been there, done there” types want to see others like themselves succeed.

Of course the real payoff lies down the road. Fast forward a bit and the entrepreneur’s business is up and running and generating a nice profit. The starving entrepreneur turns into a long term paying client for the attorney and even refer their friends.

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