Translated poorly from the original Chilean Spanish, by TMFBent and improved by Judy Ragbrai

In a small city, in the heart of the rainy season, A torrential rain fell for several days.

The city appeared deserted. Everyone had debts and lived on credit. Luckily, a Russian, full of money, arrived and entered a small hotel. He asked for a room. He put a $100 dollar bill on the receptionist’s desk and asked to see the rooms.

The manager of the hotel grabbed the bill and left running to pay his debt to the butcher.

The butcher took the bill and ran to pay his debt to the hog farmer.

In turn, the hog farmer hurried to pay the feed supplier.

This guy grabbed the bill on the fly and ran to dissolve his debt with the prostitute…

Since it had been a while since he had paid her… since in this crisis, even she had worked on credit.

The prostitute grabbed the bill and took off for the little hotel, where she had been bringing her recent clients – where she had not paid the hotel.

At that moment, the Russian came down, having checked out the rooms, and he said that none had impressed him. He took the money and left the city.

No one had gained anything, but now the whole city was living debt free and looked to the future with confidence.

It works, right? Pure market logic.

Barter affects the economic system. Bartering is fundamentally a personal activity — one-to-one, you and me getting what we want. But when millions of people are bartering, it becomes more than just an individual action; it becomes a supplemental economic system, which both complements and alters the macrocosmic system. We can see this effect in various ways:

It allows us to be less reliant on the job market. To acquire goods and services, we usually need money, which is usually acquired through a job. (If we want more goods and services, we usually have to get a high-paying job.) But when we barter, each trade is a “job” in itself; we become a businessperson who generates goods and services which we would have bought with the money from a job. Therefore:
We can accept a lower-paying job which we enjoy, and make up the difference by bartering. This lower-paying job can even be a part-time job.
We can stay at a lower-paying job which we enjoy, instead of climbing a stressful corporate ladder.
Regardless of our income level, we can supplement it by moonlighting with bartering. Instead of watching television in our free time, we can barter our services — or our goods, which could be the handicrafts from a pleasant hobby.
Bartering is not as susceptible to inflation. Consider these thoughts:
Inflation might raise the price of everything else, but if we agree that your rototilling equals my carpentry, that’s that. Two hundred years ago, we might have been able to trade an hour of tutoring for a large bag of garden vegetables. The cash price might have been 5 cents for either one. In our current era, the tutoring might cost 400 times that much ($20) and the vegetables’ price could have inflated by that same amount. But the barter deal would be exactly the same.
Bartering is not totally inflation-proof.
Inflation can occur within a barter club when some members start to add special charges (in units) when selling to the other members. (Many clubs prohibit this practice.)
The service charges and other fees in barter clubs might be considered inflationary; we must raise our prices in order to cover those extra costs.
Inflation can happen within a barter club’s economic system because it is associated with the money-based economy. When prices rise in the money-based economy, they also rise in a unit-based barter club; for example, when a $500 TV set inflates to $600, the barter-club members must then pay 600 units to buy it.
Inflation might occur in a community’s economy when a new barter club introduces its money supply in the form of units. If the club creates hundreds of thousands of dollars worth of units, the effect would be the same as if it had introduced the same amount of dollars.
Bartering has a different dynamic in “supply and demand.” If the shovel manufacturers of the world unite and suddenly produce enough shovels to give 100 of them to everyone, there would be no effect on the value of our shovel in terms of its ability to dig potatoes. (Try doing a similar saturation with $100 bills, and see how their value is affected.) Of course, if we try to trade that shovel, we will find that it has no value as a medium of exchange, since everyone has 100 of them.
Bartering allows businesses to sell goods and services to cash-poor customers. We can see barter’s influence wherever a barterer is placing an extra order for farm supplies, filling an empty table at a restaurant, or joining a telephone-answering service which had been going broke. Bob Murley of Full Circle Marketing explained that some excess production capacity can as good as money: ”Everybody who produces something has a greater capacity to produce more of the same thing than to get something new or to create something new. So if a man is manufacturing tennis rackets, he can produce another thousand tennis rackets easier than he could go out and create a cruise for himself or advertising space for himself or travel credits for himself. So excess production is a tradable, barterable commodity.”
Bartering affects credit.
When we can pay for some goods and services by bartering, we might not need to borrow as much money.
Barter clubs lend their units. This is an additional line of credit for us.
Bartering provides an additional “safety net.” Non-profit barter clubs provide a means by which cash-poor people can acquire the necessities of life — food, housing, clothing, etc. When I worked at a non-profit barter club, I saw people who were in severe financial distress — not knowing where they would find their next meal. We were usually able to help those people. While bartering assists the people, it also makes them less dependent upon taxpayer-supported government programs, e.g., welfare and food stamps.
It creates micro-economic systems. Indeed, the sheer magnitude of the macro-economy could be one of its problems. Theodore Rosjack said, in the introduction to E. F. Schumacher’s book, Small is Beautiful, “… whether the bigness is that of public or private bureaucracies … from bigness comes impersonality, insensitivity, and a lust to concentrate abstract power.” It is easier to accumulate (and abuse) assets and power in a money-based system than in a direct-barter system; however, bartering, too, can be used to amass wealth, particularly in a field like real-estate exchanges. And “small” is not always “beautiful”; sometimes it is weak and inefficient, as demonstrated by some barter clubs and by the difficulty in setting up one-to-one trades as a way of life.
It provides a basis for the re-definition of money and economics. Some people believe that bartering is a philosophical challenge to our money-based economic system. These people create barter clubs which are decentralized, operated by members of the community, and guided by idealistic motives. Some of them try to transform economic values by making all labor equal: Your hour of work equals mine, even though you are a doctor and I am a window-washer. Paul Fink of the Community Skills Exchange in Olympia, Washington, expressed a far-reaching philosophy on bartering in a letter to me. He said: “I find barter books much too apolitical. Our Community Skills Exchange is based on an end to: the monetary system, hierarchy of wages, an unequal social employer/employee relationship, centralization of production and service, specialization of individuals, and labor as merely an ‘economic’ exchange. Our organization attempts to teach people how to take charge of their own lives and once again feel powerful. As far as we’re concerned, empowerment is the focal issue.” The idealistic barterers are presenting interesting ideas about commerce and money. They give their organizations names like “Skills Bank” and even “Energy Bank,” as though assets and money are taking on a different meaning to these people. The skills and energy of the community are indeed stored there — in a form which can be more real and directly usable than cash.

Does bartering have a place in a healthy economy? The popularity of bartering has risen and fallen throughout history as national economies have become depressed or prosperous. In the 20th century, we saw an increase in bartering during the U.S. depression of the 1930s, and in post-World-War-II Europe. Bartering became popular again during the extended recession of the early 1980s in the US. When the economy is in good condition, people would rather spend their abundance of cash — but when inflation is high, and many people are unemployed, and cash is less available, people want to barter. However, bartering might have found a permanent place in a healthy economy, for these reasons:

Contemporary barter clubs. These clubs do not rely on one-to-one trades; instead, they use a computerized system of “units” which make bartering almost as easy to use as money. The clubs are printing their own checks, issuing their own credit cards, distributing their own scrip, making loans with interest, and providing other alternatives to the money-based economy.
Lack of faith in the economy. We are in a world of corporate restructuring, down-sizing, rapidly changing industries, periodic recessions, a high rate of bankruptcy, and other changes — and the ever-present possibility that the entire system could collapse someday. In this world, bartering gives some stability; we can barter regardless of the condition of the general economy.
Bartering’s respectability. Although some corporations (and individuals) hesitate to barter because the activity still carries some of its stigma as a sign of poverty and distress, it is coming into the mainstream as a smart way to do business, even when our finances are strong.
Bartering will always be popular in its personal forms — in the trade of our turnips for a neighbor’s banana bread, and the trade of our kid’s marbles for another kid’s toy. In those situations, barter is not determined by economic conditions; it is a ritual and an expression of friendship — and it is a natural, deep-rooted part of our heritage and humanity.

To be on the internet!

Approximately 2 billion people worldwide have access to the World Wide Web (WWW) at this time. Whatever your business profile is, you can not ignore the two billion people. You can exponentially increase the number of customers and partners. To be part of this community and to show your interest in appealing to them, you must be on the Internet. And last but not least, you should be on the Internet as your competitors might already be there.

Networking!

The most important factor you should keep in mind in the medium of doing business is networking – having connections to ever more people. Every intelligent business person knows ‘that’s not what you know, it’s who you know’.  Exchanging business cards is part of a good business meeting, and many business people can tell how trivial a meeting has turned out to be a big business. So,  if you were to have the opportunity to give your business card to thousands, maybe millions of potential customers and partners, saying “this is what I do and if you ever need my services, this is how you reach me”?

To make available information on your business!
What are the basics of the business? Think of a Yellow Pages ad. What are your hours? What are you doing? How can someone get in touch with you? What payment methods have worked? Where are you located? Now think of a Yellow Pages ad where you have instant communication. What is special today? Interest rate today? Information about promotions in the next week! If you could  inform your customers about all the reasons why they should do business with you, don’t you think you could do more business? You can now be on www.

To serve your customers!
24 hour access to information, is one of the most important ways to appeal to your clients. When talking about customer service, technology used on the WWW allows us to pamper the client.

To arouse public interest!
We all know how hard it is to write about your business in a well known publication. But if you manage to come up with something new and innovative, as the Internet certainly allows you to, publications will take over.
Appearing in a publication, covers only the area where the publication is distributed. Instead, an ad on the Internet can reach anyone in any area, so your the audience that sees your message is exponentially greater.

To sell things!
Many people believe that this is the first reason you make a website, but before getting to this part, the above mentioned must be met. Why?
Well, the answer is complex, but the best way to explain it is through an easy example. Do you think mobile communication is the best way to sell things?
Probably not. Maybe you consider it a tool that allows you to reach the customers and, in turn, helps you sell things. Well, you just have to think the same about the www.
The technology is different, of course, but before people become your customers, they want to know about you, what you do and what you can do for them. All of these are easy and fre available via your website www.
When you’re ready to sell, make sure that there is all the  information that people need in order to be able to decide on choosing the services you provide, without paying a huge amount.

Other reasons:

• To provide a 24 hour service
• To answer the questions of customers/partners in real time
• To have access to international markets
• To allow feedback from customers
• To test new markets, products and services
• To publish at any moment pictures, video recordings
• To easily penetrate targeted- specialized markets

Let’s not forget that “all businesses that do not become e-business will become ex-business”:)

Maria Calinescu

The term “value ” comes from the Latin optimus “expressing what ensures the best interests pursued.

OPTIMIZE is the best choice and application of several possible solutions.

Optimization of maximizing and minimizing operating as arithmetic functions in connection with the company.

Optimizing business processes aimed at finding those solutions to ensure that the intended function (maximize profit, minimize costs, maximize productivity, etc.).

Optimal double sense:

• extreme value (maximum-minimum) for a purpose functions
• choosing the best based on one or more criteria of possible states of a system

• macroeconomic
• microeconomic
• average (teritorial)

Economic optimization is performed on two timelines:

• Short term – involves the production volume in certain circumstances and maximize profit
• Run term – aimed on the one hand, maximizing profits by combining factors of production, and on the other hand, obtaining a certain volume of production with minimal costs.

Accesbil Internet will be everywhere.
Our society could not function today without Wi-Fi, but became predominant in the early to mid 2000s. Before that, I used the Ethernet cable and the primary method for connecting to the web was through telephone lines. Every few years, our method of accessing the web is amended in the hope of being quicker and more accessible.

These things are assumptions claim that the Internet will be accessible from anywhere and at any time: the emergence of 3G and 4G wireless networks, location and appearance of thousands of wi-fi or wi-fi that rumor about U.S. national project. Barnes & Noble, Borders Books and McDonald’s have recently added thousands of locations, switching to free Wi-Fi pay.
Let’s talk first about 3G since its introduction in the early 2000s, it quickly spread to major cities around the world. Web access is now as simple as viagra the smartphone pocket and viagras faster with the introduction of 4G mobile network and the 4G.

National Wi-Fi project is an interesting perspective. In 2008, the FCC had a wireless spectrum auction for 700 MHz frequencies. It was the center of attention when Google announced this action as one of the participants in the auction, entering the game with an offer of billions of dollars. Some have speculated that Google wanted to transform radio frequencies into a national Wi-Fi network. While Verizon has finally won a national Wi-Fi is still very possible and, in fact, it seems logical in view of the current direction of web technology.
The idea is that increasingly more and more devices will have access to these networks and these networks will be spread over time. Ten or twenty years people will wonder how they lived with laptops disconnected from Wi-Fi and 4G signals.

Internet access will not focus around computers
On CNN earlier this month, Adam Ostrow Mashable considered one of the biggest trends, namely access the Internet without a computer. Currently, the U.S. Internet use focuses on laptops. In Japan, however, Internet access is primarily via telephone, a trend that is only beginning for the remaining states.

This is just the beginning. The new Internet will allow us to navigate through the living room TV on the Internet and soon our cars will become Wi-Fi hotspots.
Apple Tablet appears to be the next stage of development. And access to the 3G network was inevitable. Instead of jumping on the computer to check your email, you can use this board to see what happens.
In ten years, computers will be just a small part of how we access the Internet. We access the Internet from any machine or device that belongs to us.

Social media will be the largest component of the internt
Statistics published by Nielsen shows that using social media channels increased by 82% last year, an astronomical increase. On Facebook, Twitter, YouTube, blogs and social networking focus our online interaction, even more than search.

We are social creatures, so it was just a matter of time before I understood how to make the Internet an effective medium of communication, sharing and friendship.

Now that we are in this social stratum, it is hard to find a scenario where the growth of social media would not continue.

In ten years, when you access the Internet, most of the time you will spend connecting with friends. This will be possible almost entirely through social networks and through social media. This will be the number one reason for which we carry phones for us, tables or computers.

In view of this article let us be one step ahead of the Internet and making the message “all businesses that do not become e-business will become ex-business.

Maria Calinescu

For a business that runs on the Internet, do we know if the latter is a market with perfect competition?

In order to try and answer this question, I will briefly introduce you to the characteristics of the market with perfect competition.

• Atomicity - on a certain market, there are a large number of small producers and consumers, but each one is so insignificant, that individual actions have no impact on the quantities produced on the market or on the sale prices of products, firms considering the price as given.

At present, according to statistics above, 1966514816 out of the global population od 6845609960 people use the Internet. The 2 billion Internet users are, at the same time, both consumers and producers (sellers) and this demonstrates that the Internet is a market on which a large number of consumers / producers operates with minimal influence, so with equal opportunities in this market, exemplifying the first feature of perfect competition in real context.

• Uniformity – the goods and services are perfect substitutes.
• Perfect and complete information – companies and consumers know exactly the prices set by all firms

Margarine and butter are an example of substitute goods. On the Internet we find substitute goods and besides that, we can see prices and offers in real time. Due to the specialized directories, with only three clicks you can see the product / service that interests you, the available suppliers from which we can a purchase it and the price charged by each, all of these in a process lasting somewhere from 5-10 minutes. This describes a total transparency that can not be found on any other market.

“(The Internet) It has had a tremendous effect. Look at what has happened in China. People can talk to each other, and the government, despite its best efforts, can’t control it.

The Internet also moves us closer to “perfect information” on markets. Individuals and companies alike can buy and sell across borders and jurisdictions wherever they find the best match of supply and demand. Undoubtedly it has reduced the possibilities of taxation. Why should I buy something here if I can buy it from a company in Japan or England or Brazil with a lower tax?

The Internet is the most effective instrument we have for globalization. ” Says Milton Friedman, supporting the arguments in favor of the assumptions that the Internet provides free, perfect and complete information.

• Equal access to technology - all firms have access to production technologies.

Entering the “internet” is very accessible. Anyone, anytime, can have access, both as buyer and as a producer. Costs are minimal and the technology can be assimilated by anyone.

• Mobility – the resources (including information) are mobile,  manufacturing companies having the freedom to leave the markets experiencing loses and orientate towards the profitable ones.

An example of mobility on the Internet is as follows: A producer has an electronics store, and for some reason can not sell electronics anymore, but may sell clothes. Due to technology can change his virtual shop in just a few days with minimal cost, and acting the same with the advertisement he had until the change. Things are not quite the same on the real markets,  where the costs and time needed to perform such a change are significantly higher.

• Free entrance – any company can enter or exit the market by their own free will

This is also true on the Internet as there are no costs for entry or exit, or if they are, are minimal. But besides these minimum costs , there is also a permissive legislation, which eases things even more.

The conclusion can not be other than this: Yes, the Internet tends towards the status of market with perfect competition. Hence the message “all businesses that do not become e-business will become ex-business” is meaningful.

Maria Calinescu

Management is efficient and effective management of an activity. From this perspective, the manager can not make business profitable for the company responsible if you do not know how to manage resources effectively.

And time is a valuable economic resource, demanding and irreversible: when is the rare resource, but at the same time being non-replaceable “unlimited” is expensive, but can not be bought, stored, copied and its loss can be achieved either by the large insurance company in the world, so can not be “compensated” is highly perishable and inelastic.

However, time is not owned by anyone, is impersonal, of all and is not retained by natural borders.

Managers concerned about performance but I know time is measurable and time management is continuously and oo priority for business success.

Time can not save, it can only be consumed in an efficient manner. At this time the Internet is the place where time is spent effectively.

In other words, we can say that the Internet is optimized the way we use our time. And we’re talking about the management activities to the personal.

A statistic shows the activities of Internet users according to their frequency:

• E-mail correspondence is by far the most common Internet activity – 90% of Internet users to on e-mail.
• Looking for information, the Internet is seen as a giant public library with a commercial tilt undeniable.
• Discussions on chat rooms
• And not only commercial activities – including buying, selling, online auctions, e-banking, promotion …

In all these activities while saving people (manage resources efficiently while) because they happen on the Internet, which is in much less time than would happen in real.

For example, if you want to buy a TV and you know what you are looking for, would normally have to visit two or three stores that are near one another to find the product. This means travel, time, potential sellers who do not know how to present merchandise, crowds … etc.. Instead you enter a web directory stores, product details and give you all the stores that have be returned product. As see in a very short time where you can purchase the product at the same time, find the lowest prices and fastest delivery.

The conclusion may be different: If the Internet is used for resource efficient, then the business’s managers should understand that if you follow the message “all businesses that do not become e-business will become ex-business can achieve their business new levels of profitability.

Maria Calinescu