Barter makes comeback in Argentina

Louis Proyect lnp3 at
Sun May 6 08:07:07 MDT 2001

NY Times, Sunday, May 6, 2001 

To Weather Recession, Argentines Revert to Barter


BUENOS AIRES, May 5 — By the standards of most Latin American countries,
Pedro Pérez hardly looks like a charity case. He wears a handsome sports
watch and a thick gold wedding ring. His hair is neatly parted, he has all
his teeth and his meticulous handwriting is the product of a decent public
school education. 

But Mr. Pérez is just scraping by, struggling like many other Argentines to
hold on to a middle-class life three years into a deep recession. At 43, he
cannot count on a regular salary from his sales job at a shoe factory
anymore, so he has been forced to sell his town house and Ford sedan, and
his wife has gone back to work. 

And every Friday night Mr. Pérez carries bags of shoes, sneakers and shoe
polish his factory gives him when it is too short of cash to meet its
payroll to one of the many barter clubs that have sprouted up in this city,
where he exchanges his wares indirectly for fruits, vegetables and handmade

Bartering, that precapitalist form of commerce popular in Indian villages
in Latin America even long after the Spanish conquest, is making a
far-reaching comeback in Argentina as an improbable safety net for a
forlorn middle class not accustomed to the hardships that are a way of life
elsewhere in the region.

The trueque clubs (the word means exchange or barter in Spanish) emerged in
1995, the brainchild of three young professionals looking for a way to help
the lower-middle- class Buenos Aires suburb of Bernal overcome the brief
recession that followed the Mexican currency crisis, whose effects had
rippled throughout Latin America. 

That first barter club started with just 30 members. Today, as Argentina
muddles through a recession with no end in sight, more than 450 clubs have
been founded in 20 of the country's 24 provinces. They are nurtured first
by word of mouth and then by ample news coverage and by the Internet, which
is used to advertise their locations and schedules. 

An estimated 500,000 Argentines now barter regularly, and up to one million
— or almost 5 percent of the economically active population — do so
occasionally, according to sociologists who have studied the trend. About
10,000 people shopped at a May Day "trueque mega-fair" this week in a
Buenos Aires suburb. 

At the clubs, people set up tables and stalls to peddle goods or the
promise of services in exchange for scrip, barter money known as
"créditos." They can then use this to obtain other goods or services
through the clubs, which have established an informal network. 

The goods range from food and produce to clothing and homemade skin-care
products. The services include everything from dental work and plumbing to
psychological counseling and tarot card readings, often proffered by
underemployed or unemployed professionals. 

The traders set their prices by supply and demand, making the barter clubs
a combination of competition and neighborly solidarity. 

Today the clubs have more than $7 million worth of scrip in circulation,
bar-coded to guard against counterfeiting. An estimated $400 million in
goods and services were traded last year. Organizers say they expect an 80
percent increase in the value of the transactions this year because of the
deepening recession. 

The recession has been brought on and sustained by plunging commodity
prices, rising interest rates, mounting public debt and an overvalued
currency that has depressed exports. 

The new economy minister, Domingo Cavallo, says the economy should improve
later this year, but independent economists say the slide is continuing.
Should the government default on its debts, the recession could easily
deepen and increase the prospects of a currency devaluation, which could
cause still more companies with heavy dollar debts to fold.

"This is not a living, but it keeps me and my family above water," said Mr.
Pérez, the shoe factory salesman. "Ever since Brazil devalued two years
ago, my factory has not been able to compete. They pay us in shoes to keep
the business from collapsing until the economy picks up again — if it ever

The trueque clubs have become a vital stitch in the social fabric of scores
of towns and neighborhoods. People who might be moping at home depressed by
the near 15 percent unemployment rate and daily speculation of a government
default or currency devaluation have instead revved up at home production
of knitted sweaters, mate tea gourds and oven-baked pizzas to trade.

"It's an incubator for new businesses," said Carlos Alberto Fazio, an
Economy Ministry official who is studying ways to support the clubs. "The
people have chosen the clubs first to survive and then to reintegrate into
the formal economy." 

The trueque clubs expanded in popularity without government support. But as
it continues struggling to find a way out of the economic malaise, the
government has itself recognized the value of the clubs as a safety valve
that provides not only economic benefits but also a social and
psychological boost for people who can take problems into their own hands
in a communal setting. 

The trend is beginning to spread to neighboring Bolivia, Paraguay and Chile
and even Spain. 

In Argentina, word has gotten around that down-and-out singles are finding
mates at the clubs to share their problems, making barter clubs an
increasingly popular weekend hangout for the young. 

And one Indian village in northern Jujuy Province has done away with money
altogether in a self-proclaimed return to its indigenous roots. 

"Its producing not only a parallel economy but a subculture," said Graciela
Romer, a sociologist and political consultant.

In the last few months Argentine public officials themselves have begun to
use the barter system to improve local economies and to serve their own
needs. Five impoverished municipalities have decided to accept services
from barter club members to fix leaking school roofs or street lights in
lieu of taxes. 

The Economy Ministry has begun a program to teach basic marketing and
bookkeeping skills to 1,000 trueque traders who have begun producing their
own detergents, candles, breads and graphic designs. It is also preparing
to start a program with the national doormen's union in which the
government will pay union members to teach barter club members basic
electrical and plumbing skills.

On Friday night, the trueque club where Mr. Pérez and others go in the
Floresta neighborhood looks and feels more like an indoor flea market than
a place where the down-and-out eke out a subsistence. Women giggle to each
other as they have their hair done by underemployed coiffeurs, and the men
sip their mate tea and talk soccer while waiting for customers.

"We use the trueque as a kind of therapy," said Susanna Ríos, a 46-
year-old housewife who brought a bag of toys to trade. "It's a chance to
leave the house, make friends, and supplement the family income."

María Roldán, 35, lost her job as a secretary in a law firm three months
ago and spends three days a week looking for work. The rest of the time she
knits and crochets sweaters and baby booties to trade at trueque clubs.
Business has become so brisk, she said she is thinking of opening her own
business rather than find another job. "Bad luck has turned into an
opportunity and I am developing my creativity," she said. 

Osvaldo González, 71, was a photographer for President Juan Domingo Perón
in the 1950's, but has not worked for the last five years and has heart
disease. He started trading photographic portraits at trueque clubs two
years ago, but there was little customer interest. 

Over the last year, however, Mr. González has found a new way to supplement
his pension: he goes from neighborhood to neighborhood buying kitchen
utensils from failing stores and trades them at trueque clubs.

"With this I get all the food I need," he said. "This is a perfect way for
people to get through this crisis and it's perfect for the government to
keep the social lid on." 

Louis Proyect
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