David Hoffer's Entry For The 2004 Moffatt Prize in Economics

The desire to exchange a good, in a world where imperfect allotment of goods is the great albatross around each individual's neck, happens as often as the gas-tank of a Hummer demands a refill. There is no avoiding this universal predicament of the disproportional wants and needs in the world. Such is the impetus that drives the practical and economic principle of bartering.

This principal has been followed, adhered to, and even preferred over monetary systems since the disputable beginnings of man. Yet at some points in history the change of preference is not freely chosen, but forced due to unavoidable economic factors. During the War for Southern Independence, the South experienced some of these factors full force, and bartered out of necessity to survive.
Many are the reasons for accepting or awarding barter: no currency or comparable medium of exchange, no reasonable regulation of goods with price... etc. Within this limited historical parameters of the war between North and South, there comes to light several important elements to keep in mind. Primarily, the South was under a heavy economic depression and severely "handicapped" (Massey, 27) due to the loss of labor and means of productions that were engaged in achieving Southern independence. This shortage leaked into other areas, as a contraction of production and manpower directly affected manufacturing of wartime goods, food, clothing and textiles, and so on.

(Massey, 27) Secondly, the Confederate States' government failed to firmly root their currency in realistic expectations, and allowed it to be very weak at best. These two connected factors, not mutually exclusive, show the gravity of the economic situation in the South and the consequent necessity during the war to initiate bartering as a means of subsistence.

In Cold Mountain, a novel by Charles Frazier, a foil to the heroine and an African-American Virginian (though not a slave) embodies the mentality that became a natural and common one among common Southerners when doing business with neighbors or other townsfolk.

• Though she might be greatly concerned at their lack of cash, Ruby's opinion was that they were better off without it. Ruby had always functioned at arm's length from buying of things and viewed money with a great deal of suspicion even in the best of times, especially when she contrasted it in her mind with the solidity of hunting and gathering, planting and harvesting. (Frazier, 95)

The hunter-gatherer mindset is simply that of a barterer, for whatever the good that is being gathered happens to be, it will be used or traded. Just because you might not like red meat does not bar your neighbor from enjoying it, and as he has a pear tree in front, you should consider that when you come upon a deer in the forest. A valid and productive trade can be made from one to the other giving each better utility for what each now possesses. Ruby does this, it says, on account of her tepidity concerning currency. But even if she did have an abundance of wealth in Confederate dollars,

• Shopkeepers really didn't want money since the value of it would likely drop before they could get shut of it. The general feelings was that paper money ought to be spent as soon as possible; otherwise it might easily become worth no more than an equal volume of chaff.(Frazier, 95)

This is rightly so, as the Confederate currency fluctuated heavily from its conception to its death.
Be Sure to Continue to Page 2 of "Bartering on Insanity: The Economic Aspect of the Civil War".