An Informal Economy

Traditionally, ‘informal economy’ referred to economic activity that is neither taxed nor regulated by a government. Even though the term may be rather unfamiliar, examples of informal economies practices are as familiar as babysitting or the drug trade. But I recently read a different description of  ‘informal economy’: “that which allows people to acquire goods and services they might not otherwise afford.” It’s an idea that deserves more than a glance. As we move into the second half of 2015, I sense a deepening economic uncertainty that demands each of us find ways to transition to a life style that is built on community, local resilience and living well on less. Enter: trade and barter.

Not long ago I bartered fresh heads of bok choy in exchange for a nurse neighbor’s steady hand in giving Michael his B-12 shots. We often trade watering or harvesting chores down at the community garden with fellow vacationers. A friend recently had a raised bed but nothing to plant in it, nor any extra money to invest in it. So I gave her some of my heirloom bean seeds that I’d saved, to plant in her bed. She’ll no doubt enjoy eating her beans all winter, and has promised to repay me in fresh beans. Yesterday I offered my skills as a canner to a woman that is equally skilled in quilting. We will both benefit from our reciprocal agreement to ‘help one another’. Carpooling, house and pet sitting are favorite trade-offs for me. I also enjoy doing sewing repairs in exchange for goods or services that I might need. Years ago I helped an acquaintance prepare for a major move by organizing and packing, in exchange for several months of fiddle lessons; our friendship has lasted long after the trades were completed. These informal economies help friendships to grow and allow all involved to benefit without any money being exchanged.

I wrote here recently about the free truckloads of gravel for my driveway I was able to get, via Freecycle, from a nearby church, who just wanted it off of their parking lot. My own church offers many, many opportunities for sharing and trading of goods and services. Our local electric cooperative delivers shredded wood mulch for free to anyone that lives within the city limits, and the city crews deliver shredded leaves for our compost piles during the fall leaf pickup. The members of the nearby community garden that I manage are constantly learning from, trading with, and helping one another, even though we all started as perfect strangers and have few common bonds other than our love for growing fresh, organic food. From an online community to a community garden, all of these informal economies help to build community strength and resilience.

 The nearby town of Abingdon, VA is home to the Barter Theater, a live theater venue that was set up during the Depression and so named because you could gain admission to see a play by bartering fresh eggs, produce or chickens instead of paying the 40 cent admission price. During that same period, when no one had any cash, it wasn’t uncommon for doctors to accept food as payment. My own grandfather was known to accept car repairs and haircuts as payment for his bookkeeping and accounting skills.

Produce traded at Barter Theatre
Produce traded at Barter Theater, circa 1933

For all those aspects of life that we need in order to sustain ourselves and thrive, how do we significantly increase resilience (in response to peak oil), drastically reduce carbon emissions (in response to climate change) and greatly strengthen our local economy (in response to economic instability)? An Informal Economy is a logical starting point and offers limitless possibilities that can help us with these transition issues. Some communities have even gone so far as to start community currencies based on barter, trading one hour of work for $10 in credit. From food to computer skills, we all have something to offer. Might a more formal organization of these kinds of efforts be more helpful or hassle? Please let me know in the comments section below if you or your community are working in informal economies, and what affects it is having on your resilience and/or personal economy.


4 Comments so far
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I’ve thought about organizing a barter/trade organization, where you keep “score” with credits to keep the deadbeats from taking advantage. This just means inventing your own currency system.

I grew up despising “networking” as somehow something slimy that phony salespeople did, until I realized that what you are really doing is connecting with people who are willing to help each other out without keeping score. You help those you can with no expectation of a quid-pro-quo payment, but when you have needs, others in your network look out for you. This is just as true whether you are talking “circle of friends” or “business acquaintances”. What keeps out the deadbeats is your reputation in the community. Ironic, isn’t it, that american capitalism only works with something that looks like communism going on in the background? If we’re on the outside, we disparagingly call it “smoke filled back room”, but it’s this same networking – a community of people that trusts each other.

I very much want to help shape something at HVUUC to help our congregants and hope this sort of thing gets discussed at the JULY 26 workshop after the service.

Comment by gtkeep2013

My two cents worth is that the “informal” approach to bartering is the only way it will work. Organizing this type of effort will depend on someone’s willingness to do some meticulous recordkeeping. Even then, deadbeats will be a problem. Trust is the key and, sad to say, that will sometimes be abused. Way back when, farmers shared work and equipment, there were times when one would have to go looking for that plow a neighbor had borrowed last year. That same neighbor would do the same thing year after year. Or, even if he did bring the plow back, it might have an important bolt missing. “Formal” organization will be more of a hassle in today’s society.

Comment by Karen

Nothing like that goes on here, and it would be such a good thing. There isn’t the spirit of cooperation that you always talk about. We couldn’t even keep a farmers’ market going after two tries. Seems like everybody for themselves, when working for and with each other would benefit so many. Rock on, girl, cos you inspire me with every post.

Comment by sarasinart

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