Tuesday, April 5, 2016

Neoliberal Barter

The Argentinian financial crisis of the early 2000's created situations not unlike those that I am researching for my project. One aspect of the liberalization of the post-Soviet economy was the increased reliance on (already existing) barter economies. In the Russian sense it was the tightening of the military budget that made it impossible to pay contractors, energy companies, and wages in full with cash that created a cycle in which almost everything was payed in barter. Individuals were paid in food, federal taxes owed utilities were paid in oil, and so on but what is interesting in comparison is how in Russia it is very easy to profit in real money from barter whereas, for example in construction, barter in Argentina included contracts that were still related to foreign currencies. In Russia, an oil company let's say, would pay a middle man in oil which he would then transport out of the country making a fortune due to the price difference and deposit some profit in a foreign bank account while, let's say during a drought, would ship back foodstuffs which the Russian company would make a killing off if trading it locally for more oil. In Argentina, presumably because of the extensive use of the U.S. dollar barter was done with basically quasi-bank notes that circulated in a similar way in the sense of paying salaries and taxes but lacked the profitability of the Russian barter economy.

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