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The disadvantage of using barter in the past was that it depended on the mutual coincidence of needs. Before any transaction could be undertaken, the needs of one person must mirror the needs of another person. That is, if you have a surplus of goats and need more wheat, you must find someone that has a surplus of wheat and needs more goats. To overcome this mutual coincidence problem, intermediaries developed that would store, trade, and warehouse commodities. However, this often implied that the intermediaries suffered from extreme risk.
Because barter is so expensive, it is very rare. To organize production and to distribute goods and services among their populations, many pre- capitalist or pre-market economies relied on tradition, top-down command, or community democracy instead of market exchange organized using barter. Relations of reciprocity and/or redistribution substituted for market exchange. Trade and barter was primarily reserved for trade between communities or countries.
Barter becomes more and more difficult when more people become dispossesed of the means of production needed to produce products, including their subsistence. For example, if money was totally abolished in the United States, most people would have nothing of value to trade for food (since the farmer can only use so many cars, etc.)
To overcome the mutual coincidence barrier, some people have proposed the creation of "barter exchange companies" that offer an alternative currency, the barter dollar. However, this is not true barter, because it involves currency.
In finance, the word "barter" is used when two corporations trade with each other using non-money financial assets (such as U.S. Treasury bills). Alternatively, the standard definitions of money could be seen as being too narrow and needing to be expanded to increase near-money assets.
See also: Reciprocity, Economics, BusinessHistorically, the term business referred to activities or interests. By extension the word became (as recently as the 18th century) synonymous with an individual commercial enterprise. It has also taken on the more general meaning of a nexus of commercial, MarketingMarketing is the craft of linking the producers (or potential producers) of a product or service with customers, both existing and potential. Some form of marketing arises naturally in all capitalist societies but is not limited to capitalist societies., Local currencyIn economics, a local currency is a currency not backed by a national government, and intended to trade only in a small area. Advocates such as Jane Jacobs argue that this enables an economically depressed region to pull itself up, by giving the people li, International tradeInternational trade is defined as trade between two or more partners from different countries (an exporter and an importer). Early international trade consisted mostly of barter transactions. International trade is also a branch of economics. Traditionall, Hyperinflation. List of international trade topicsInternational trade an overview Agreement on Trade-Related Aspects of Intellectual Property Rights Autarky Balance of trade barter Bimetallism Bretton Woods system Cash crop Comparative advantage Continental trading bloc Cost, insurance and freight Curren
SALT as MONEY Aristotle believed that primitive barter trading of standardised commodities 'hall-marked" by an authority for correct weight and quality, represented the first use of "money". He says......."as the the necessaries of nature were not all easily portable, people agreed for the purposes of barter, mutually to give and receive some article which.....was practically easy to handle in the business of life.....
The trading of standardised pieces of salt, and metal have all the the aspects of dealing in what we call today....money. For instance bread-like moles of salt each weighing about 5 kg still circulate in Ethiopia as a means of payment.
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