Barter of Russians in prison for prisoners in Russia--Redemption of Captives

 Barter is alive and well in diplomacy, as evidenced by yesterday's multi-country multi-party prisoner swap.  Among the highlights was a journalist for a hitman.

The Washington Post has the story, with multiple headlines.

Biden: Prisoner swap ‘a feat of diplomacy’. U.S. reporter, others freed in complex, landmark, multicountry exchange with Russia

U.S., Germany trade convicted assassin to Russia for political prisoners in major swap The landmark prisoner swap freed Russians jailed in the West, including a convicted killer, . for U.S. journalist Evan Gershkovich, dissident Vladimir Kara-Murza and others. By Shane Harris, Yasmeen Abutaleb, Mary Ilyushina and Souad Mekhennet, August 1, 2024

"In the largest prisoner exchange since the height of the Cold War, officials of the United States, Russia, Germany and other countries met on an airfield in Ankara, Turkey, on Thursday and swapped at least 24 people — capping months of painstaking diplomacy involving negotiations at the highest levels of nine governments.

"Those released included a Russian assassin convicted of murder in Berlin; the American journalist Evan Gershkovich, who was accused of espionage without any known evidence; and several Russian dissidents whose only misdeed was demanding freedom and democracy or criticizing the war in Ukraine, including Vladimir Kara-Murza, a Washington Post Opinions contributor.

"White House officials called it the largest and most complicated international prisoner exchange in decades, and one of the biggest diplomatic accomplishments of Joe Biden’s presidency... But the deal was also fraught, raising questions about the West’s willingness to deal with authoritarian regimes that imprison innocen..t people for negotiating leverage."

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All the exchanged prisoners were serving time, so this could be viewed as a bizarre variety of the time swaps in yesterday's post.

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Pidyon shvuyim (Hebrew: פִּדְיוֹן שְׁבוּיִים, literally: Redemption of Captives) is a religious duty in Judaism to free hostages. Historically, many captives have been redeemed, as when Jewish refugees were brought out from behind the Iron curtain with payments to the governments preventing them from emigrating.  (At equilibrium, this means Jews are often taken hostage, as  in the Hamas attack on October 7.)

Time banking

 Here's the latest Freakonomics podcast, on time banking. Dubner interviews some proponents, and a skeptic. I was the skeptic. It's not that I think time banking is a bad idea, I think it's a good idea, but a good idea like Esperanto, not a good idea like money... 

The World’s Most Valuable Unused Resource. It’s not oil or water or plutonium — it’s human hours. We’ve got an idea for putting them to use, and for building a more human-centered economy. But we need your help.

One of the proponents is Andrew Yang.

Here's an excerpt from the transcript

"YANG: Yeah, the best example I can use is that punch card at your local deli where you get 10 sandwiches, and you get the 11th for free. That has a place of honor in your wallet. And you get really excited when you get close to the free sandwich. If you can imagine a version of the deli punch card for showing up to all sorts of things like that’s the vision. Americans love points. Americans love rewards. Americans love stuff. I have these reward points on my Amex, and it’s mesmerizing, even though right now, it doesn’t cost them anything because I’m not going to redeem it because I’m hoarding for — I don’t know what I’m hoarding for. That’s really the core idea, is that if you give Americans cumulative rewards for doing awesome stuff, you’ll see more awesome stuff.

Okay, so who could possibly be against a scheme that rewards people for doing awesome stuff? Well, there is a certain Nobel Prize-winning economist.

ROTH: Some people’s time might be more valuable than other people’s.

That’s coming up.

*      *      *

As appealing as the idea of time banking is to me, and to Andrew Yang, most economists think that money is a much better measure of value than time. Here, again, is Al Roth.

ROTH: Time is an interesting commodity, and we buy and sell it all the time. When you hire a lawyer, he bills you by the hour. You give him money for his time and expertise. You might hire someone to house-sit for you, and water your plants while you’re away. So we trade time a lot, but not for time. And part of the reason is that time is sort of a clunky commodity. It’s a lot easier to trade other things.

DUBNER: But why is it so clunky? I mean, just as a dollar is a dollar, an hour is an hour.

ROTH: Well, one of the things we worry about with monetary markets is, some people have more dollars than other people do, and that gives them more access. And maybe we don’t always feel great about that. And so I think some of the charm to people who are charmed by time banks is that everyone has 24 hours in a day. But, you know, a working mother of three kids has less time than a retired banker who has a cleaner coming to his house, and a gardener. So not everyone has the same amount of time. And it’s clunky because it’s also hard to transfer. There’s the joke about the lawyer who goes to see a dentist, and the dentist fills his cavity in 10 minutes. The lawyer says to him, “You make more per hour than I do.” And the dentist says, “Would you prefer that I took an hour?”

DUBNER: So we solicited a few other economists to come on the show to talk about time banking. One of them, who shall go unnamed, wrote back to say: “The more I think about it, the more I think it is the dumbest idea in the world.” So do you hate the idea as much as that economist?

ROTH: I don’t hate it as much as that economist. By and large, I think that finding more opportunities for valuable exchange, for exchange that improves welfare on both sides, is a good thing. So I certainly have nothing against swapping time for time. I just don’t think of it as a scalable way to run a significant part of the economy.

DUBNER: The reason the idea appeals to me is because I’ve spent a lot of time with people like you, economists. And when you get a little bit off the beaten path, you start thinking about things like shadow time, right, the hours I have when I’m not on the clock, and what they’re worth to me and how I could spend them. And then I also just think about human capital, which economists are always going on and on about. It feels like that’s the purpose of a lot of economic research these days, is to show how important it is for people to build human capital through education and social networks and so on, because human capital is indeed really valuable. But then when I look around the world, I see so much surplus, dare I say, wasted human capital. People who are able to do things that may not be that valuable in a regular market circumstance, and may not even be that valuable to them, but might be very valuable to other people. And wouldn’t it be wonderful to find a way to give value to that surplus human capital? I mean, if you add it all up, that could be the biggest natural resource in the world, worth more than all the petroleum and other mineral products combined. And then I thought, well, who out there in the world would appreciate that more than Al Roth, who recognized that there is surplus sitting around in people’s bodies, for instance, in the form of a second kidney, and found a way to set up a system to make those extra kidneys available. So does that make time banking a tad more viable in your view?

ROTH: Well, I already said that I am in favor of looking for ways to increase valuable exchanges. So when time for time works, that’s great. But when you talk about human capital, you’re already suggesting that on some tasks, some people’s time might be more valuable than other people’s, because they have more human capital. And that’s what makes time clunky, if all we’re doing is swapping time. You know, I live on a college campus, so we trade time all the time, by inviting people to dinner. And then they invite us back to dinner. Dinner is sort of time, you expect you’re going to spend two, two-and-a-half hours with people and create connections that can’t be monetized. And it’s part of what makes life worth living. And if they had to eat and run, it would be a less-successful dinner. 

...

DUBNER: But I could imagine a scenario where, let’s say, there’s a person running a roofing business, maybe they’re second- or third-generation even. And they’ve decided that the way forward is to do solar installations. You’re in California. I’m sure there’s a big market for that there. But they don’t really know how to set up their business to optimize for that. They don’t know what kinds of partnerships, and maybe there’s some tax strategy, and just setting up the business that they’re not clear on. But boy, Professor Roth, he loves to talk to people about problems like that. And he also needs a new roof. So that sounds like a really nice possible exchange that could happen in the time bank. Would you be open to discussing that?

ROTH: I’d be open to discussing it.

DUBNER: He said, reluctantly.

ROTH: I say reluctantly because I certainly wouldn’t want that to be the only way I could get my roof repaired. "

Food trucks trade assigned spaces in Washington DC

D.C. food trucks look to new platform to swap spaces assigned in lottery

"It didn’t take long after D.C. started doling out parking spaces to the city’s food trucks that the D.C., Maryland and Virginia Food Truck Association hit on one unfailing principal of economics: Where one market pops up, a secondary market will surely follow.

Food truckers, after getting their assigned spaces in the city's mobile roadway vending zones each month, were frantically hitting up the association’s message board with requests to trade days. It made for way too many emails, and not a lot of successful trades.

So the DMVFTA decided to find a better way. Now, a few months later, the association is about to launch its very own digital trading platform on its website.

...

"Hoffman had a group of masters students who needed a final project. With her guidance, those students developed a proof-of-concept program that took into account the truckers’ preferences for trades and automatically assigned new slots. In the end, the program spits out a new schedule for assigned spots that can be submitted to the D.C. Department of Consumer and Regulatory Affairs, so they are able to enforce the assignments."

HT: Paul Milgrom

Home exchanges

In the WSJ, a retired California couple discuss the (approaching three dozen) home exchanges they have done, bartering a stay at their San Diego condo for visits of a few weeks to a month all over the world, via two networks, homeexchange.com and homelink.org.

"Exchanging homes involves some negotiating. Your leverage depends on the desirability of the home you have to exchange. In the U.S., New York, San Francisco and Washington, D.C., are favorites of international exchangers. After that, there is a second tier of cities, which includes San Diego.

"(One tricky area in negotiations: whether to exchange cars. Our preference is to rely on local transportation. Some cities, like Paris and London, have great public transportation. Unfortunately, San Diego doesn't, and our exchange partners feel strongly that we need to exchange cars. We've done so about half the time.)
...
"On each Internet site, we have a page with photos of our home, information about San Diego and ourselves, and details about when, where and with whom we want to exchange. Once we make contact with a potential partner, we discuss details of dates, number of people, transportation, etc. On average, an exchange takes about 20 emails and an occasional phone call to work out all the arrangements.
...
"We are often asked if we have any problems with our exchanges. We do. The biggest problem is cancellations. Since our first choice is to exchange with other older adults, unexpected medical problems can be an issue. With younger exchangers, you can encounter job or financial problems. In a few cases, my guess is that people cancel because they get a better offer—but they never admit that.

"We have had seven cancellations in connection with our 32 exchanges. Fortunately, all except one were early enough that we hadn't made plane reservations and could arrange alternative exchanges."

Barter in a recession

In a Tight Holiday Season, Some Turn to Barter

"The proliferation of Web sites with names like Swap.com and SwapMamas have moved swaps from the home and the community center to online bazaars with millions of users. No industry figures exist on the number of for-profit startups, but officials at one of the largest, Swap.com, said they have over a million registered users and an inventory of 15 million items at any given time.

"ThredUP opened business in April as a clothing exchange site and expanded this month to toys. Mrs. Spitzer signed up as a member in August.
She said that she used to buy new clothes for her three children, all under age 7, every couple of months and then give them away as her children outgrew them. But after she joined ThredUP, she began viewing her children’s hand-me-downs as currency."

Swap.com and ThredUP charge a small fee for each trade ($1 and $5). I didn't see such a fee on SwapMamas, which also encourages people to offer their used goods as gifts when they don't find a coincidence of wants, and has a reputation system that is intended to make frequent givers also favored recipients of gifts.

Barter and illiquidity in Russia

The NY Times reports that in Russia, where rubles are getting scarce but prices are remaining sticky, there's a growing interest in barter exchanges:
Have Car, Need Briefs? In Russia, Barter Is Back .

"Advertisements are beginning to appear in newspapers and online, like one that offered “2,500,000 rubles’ worth of premium underwear for any automobile,” and another promising “lumber in Krasnoyarsk for food or medicine.” A crane manufacturer in Yekaterinburg is paying its debtors with excavators.
And one of Russia’s original commodities traders, German L. Sterligov, has rolled out a splashy “anti-crisis” initiative that he says will link long chains of enterprises in a worldwide barter system.
All this evokes a bit of déjà vu. In the mid-1990s, barter transactions in Russia accounted for an astonishing 50 percent of sales for midsize enterprises and 75 percent for large ones."
...
"Among the most upbeat of [the proponents of barter] is Mr. Sterligov, who, just as the credit crunch brought most business deals to a halt, shoveled $13 million into the Anti-Crisis Settlement and Commodity Center.
...He plans to use a computer database to create chains of six or seven enterprises having difficulty selling their products for cash, in which the last firm on the chain would pay the first in a single cash transaction.
It is the kind of multiparty barter that rose to prominence in the 1990s, when managers of factories across Russia devised complex barter chains to keep the maximum number of enterprises in business when none had cash to pay their bills. A computer, he said, can do the same job faster and more efficiently. "

Loyal followers of this blog will note the resemblance to some kinds of kidney exchange (most notably list exchange chains and altruistic donor chains).