Editing Barter (section)

===Exchanges===
[[File:Trade with indians 1820.jpg|thumb|'White traders bartering with the Indians' {{Circa}} 1820]]
Economic historian [[Karl Polanyi]] has argued that where barter is widespread, and cash supplies limited, barter is aided by the use of credit, brokerage, and money as a unit of account (i.e. used to price items). All of these strategies are found in ancient economies including Ptolemaic Egypt. They are also the basis for more recent barter exchange systems.<ref>{{cite book|title=Trade and Market in the Early Empires |year=1957 |publisher=The Free Press |location=Glencoe, Illinois |page=14 |author=Polanyi, Karl |author-link=Karl Polanyi |editor=Polanyi, Karl|display-editors=etal}}</ref>

While one-to-one bartering is practised between individuals and businesses on an informal basis, organized barter exchanges have developed to conduct third party bartering which helps overcome some of the limitations of barter. A barter exchange operates as a [[broker]] and bank in which each participating member has an account that is debited when purchases are made, and credited when sales are made.

Modern barter and trade has evolved considerably to become an effective method of increasing sales, conserving cash, moving inventory, and making use of excess [[Productive capacity|production capacity]] for businesses around the world. Businesses in a barter earn trade credits (instead of cash) that are deposited into their account. They then have the ability to purchase goods and services from other members utilizing their trade credits – they are not obligated to purchase from those whom they sold to, and vice versa. The exchange plays an important role because they provide the record-keeping, brokering expertise and monthly statements to each member. Commercial exchanges make money by charging a commission on each transaction either all on the buy side, all on the sell side, or a combination of both. Transaction fees typically run between 8 and 15%.  A successful example is [[International Monetary Systems (IMS Barter)|International Monetary Systems]], which was founded in 1985 and is one of the first exchanges in North America opened after the TEFRA Act of 1982.