Bartering or currency?

[Gryffin]

I am trying to decide if it is going to be more interesting in my world to stay away from currency and stick to a system where bartering is used instead. What do you think? I think it could lead to some interesting side stories but I want to get some other opinions before I decide to stick with it.

[Hans]

In history currency came very early. The Sumerians already had currency when they developed writing. But bartering stayed very long and is still in use in unstable areas or for small and informal trades.
So you can easily have both at the same time. Just set your emphasis where you need it to be. Currency for the rich and very formal forms of trade. Bartering for everything else. Or whatever suits you.

Getting completely rid of currency is harder to do. Currency gives a "reference value" which is needed for larger scale trade. But it is relatively easy to have rural areas where no currency is established.

[sashamerideth]

It doesn't have to be all one or the other. Even in our currency driven economy, bartering still happens. Anyhow currency overcomes the problems inherent in bartering, assigning a value to an item or service.

Say you have grain that I want. I have shoes. You don't want shoes but I have nothing else to barter with. No grain for me.

Currency acts as a mediator between my shoes and your grain. Sure if you wanted shoes then we could trade but otherwise I would need my currency to get your grain. May need to sell my shoes if I have no currency.

It could work in certain circumstances, I have a nomadic people that barters among themselves but have currency for dealing with those outside the community.

[Kevlar]

Remeber that even in currency driven countries there is bartering. The lowest of the low don't have money to buy from eachother, so they would trade. One peasant has chickens, let's say, and the other has a little bakery going on. The farmer might walk in and offer the guy two eggs for a loaf of bread, to which the baker might scoff and say his bread is worth at least a dozen. They might end up settling aroung 6 or 8 if they're both willing to haggle, but they also might get mad at eachother and the farmer may leave, of his own accord or not. Does this mean there ISN'T currency? Hardly.

Barter systems have worked well in the past, and even in the modern world, but regional powerhouses almost always start minting. As long as the country your story takes place in isn't a huge trading kingdom don't I see a huge issue in leaving out the coinage. If it IS a trading nation you COULD pull off not having currency without much issue either, as back in the day a minted coin was worth only its weight in gold. The minting itself was, more than anything, a show of power, but the widely used system of medieval European coinage did provide easy trade, and allowed everything to have a set price. Even in barter systems, however, there are often set prices on many goods, based on that ancient principle of supply and demand. A good idea, if there will be many transactions going on, or you simply want to keep track of people's funds for personal reference, is to make a chart of goods and their worth. This isn't an adamant thing, but a guideline.

Personally I would (and might) Put a list of items along the top of a chart, and down the side, and then fill the boxes with exchange rates. So, as an example, where eggs and eggs meet you would put 1:1, obviously, but where eggs and bread meet you might put something like 6:1(loaf), and in the opposite box, bread:eggs, you would put 1:6.

While a system like this would help you keep track of worths, middle ground in haggling, and expenses, the exchange rate would change with time and locale. Also, this chart idea is off the top of my head, so I won't promise it's a good one. Especially since quality and size of items can change a huge amount.

[Hans]

Say you have grain that I want. I have shoes. You don't want shoes but I have nothing else to barter with. No grain for me.

I am not aware of any bartering societies where someone has only one product to barter with or bartering is a strict on on one trade. Often everyone does nearly everything he is able to do. A shoemaker will make much more than just shoes if no currency is involved. At least everyone will help at harvest time. As long as he does enough for the community within his abilities he will get back what he needs. There is no clear system to define what someone owes someone else.
How handicapped persons are threated highly differs in different societies. They can be kept in high regard or killed at birth. Both and everything in between have exemplaric societies on earth.

That sounds communistic, but if the community is small enough and most people well known to each other it works. Now think about, why excommunication or banishment was such a severe penalty.

[Ophiucha]

I don't think a large kingdom could honestly exist without some form of currency, even if most of the common people never encounter it. Two lords wouldn't have wares to trade in the same way that two farmers might, they don't produce anything. Merchants in most societies wouldn't barter, either. I mean, if you flash a gold medallion in their face they might, but if you just come up to them for a loaf of bread, they aren't going to take a batch of eggs as a trade. But bartering is fine, and still exists to some extent, in a society that also has currency. I mean, have you ever traded something with someone? When you were a kid, did you ever give another kid three Bulbasaurs, a Mewtwo, and a Dratini for their Charizard? Or trade your fruit-by-the-foot for a brownie bite?

[Telcontar]

As has been remarked on above, barter tends to be local, and currency is more prevalent as numbers and distance grow.

[Ravana]

What they said. Currency is first and foremost a convenience: it's small and light, so you can carry a lot of it easily; it tends to retain its value against anything else you can trade it for (assuming it isn't debased); it doesn't spoil or rot; and probably most importantly, it allows you to buy from someone who doesn't need whatever products you have to offer, and sell to people who don't have products you need.

Anything that meets the above descriptions can be used as currency, though, and such transactions may end up resembling "barter" in the sense that something being used as currency might also see end uses. (I've said elsewhere that the requirements for something to make a "good" currency are all the above, plus one more item: the thing has to be useless for any other purpose. Also helps if it's shiny.) Grain would make an outstanding currency, if it weren't so bulky: everybody wants it. Salt has often been used as currency. Nails are good (as is any other small object made of iron, or whatever the highest level of metallurgy is in your world.) Shoes would probably work quite well if everybody's feet were the same size, but that puts a bit of a damper on their utility.

If you can somehow get around the items mentioned in the first paragraph, widescale barter becomes more feasible. Say you have a magic box that can hold any amount of anything, yet still weigh the same: at that point, it might be more economical for you to load your box with grain, take it to whatever faraway port needs it the most, and trade it there for whatever they produce… rather than going through the multiple transactions from producer to local buyer to shipper to foreign retailer to consumer—with everyone in the chain taking a cut, and that's ignoring the possibility of having to go through one or more moneychangers to convert from one land's currency to another, with them taking their cuts. Or warehousers. Or transshippers. Et cetera. (Okay, the individual farmer isn't going to be hopping on that boat, but all the other steps could potentially be cut out if middleman #1 doesn't mind traveling.) That, however, is likely the sort of thing it would require to have a large, widespread barter economy absent some form of currency.

[Chilari]

I think it depends on the culture you're using. As some of the above posters have pointed out, nomadic groups, in general, might prefer to barter. But there are a number of pre-coinage societies, like, for example, early iron age Britain, which used bartering. Wealth was largely determined by the number of cattle you owned and the land you could graze them on. Bronze and iron objects had value, as well as furs, all for their practical value, while aesthetically pleasing things like gold, jet beads, and so on, also had value because if you could trade a useful item for a useless but pretty one it demonstrated your wealth. But with something like that, you would need settlements to be small and society to be very carefully structured to enable those without cattle to still eat by, say, working for someone with cattle, hunting, farming wheat or other crops, creating bronze tools, etc.

[Dragonie]

I agree with what the others have said about bartering being more "small town" and currency more "city." I think it could be really interesting if you have both and switch between them depending on the location!