Introduction

This chapter analyses barter practices in a micro perspective. It offers a graphic description of the technical aspects of barter chains, discusses possibilities of shadow production and assesses the transaction costs of tax evasion for a small provincial firm trading almost entirely in barter. Most importantly, the chapter illustrates the range of shadow practices deployed in barter operations–such as using double books and fake documents for defrauding tax authorities, ‘laundering’ cash in barter trans- actions, dealing with criminalised businesses, giving and receiving bribes, gifts, favours, etc. These practices seem logical under the circumstances, but look absurd in purely economic terms and are often criminal in purely legal terms.

The detailed ethnography presented below suggests that those exercising them often view these shadow practices in terms of economic necessity. At the same time, most of the shadow economy's activities qualify as economic fraud. A discourse of economic necessity, referring to everything from ineffective legislation to the inevitable pressures of the production cycle, leads to an acceptance of shadow practices, while the self-interested nature of such ‘economic necessity’ – an important factor supporting the existence of barter – remains unnoticed. I will illustrate in detail how blurred the logic of necessity and the logic of personal interest have become, and how much both of them are tied to, merged with and mediated by, personal contacts.