The Barter Way
– Vaibhav Mishra F.Y.MMS
Money. A key component to almost everything that we’re doing today. Be it typing, writing, selling, fighting, acting, thinking, doing a job, running a business, anything and everything has the same base, we do it for money. Because money can buy what we don’t have, it can provide us the ability to purchase things that we don’t posses. But imagine, what if there was no money in the economy? What if there was no common unit to measure the exact value of a commodity? Money is a very recent phenomena. It’s been around from roughly 4000 years. Humans have been living in communities and small societies for millions of years and during all this time they needed to exchange things, because they didn’t had everything that the needed. A person having a farm of wheat couldn’t grow high quality Apples in it because that only possible in cold regions. The person growing Apples couldn’t treat cold and fever because he didn’t knew how it was done. So, they were dependent on someone else for some goods and stuffs that they needed or for the specialization of some other person in things that they couldn’t do and of which they were in need of. But how would they do that if there was no medium of exchange? That’s how Barter system came into being. “I’ll give you what I have in exchange for what you have,” formed the basis of commerce. Now people who grew Apples could exchange them with people who grew Sugarcane, or anything for that matter. Now this system sounds good, but there were several loopholes. What if the person who produces Apples wants Rice but the person who produces Rice, doesn’t like Apples? How many Apples does the person need to give in order to get a kilogram of Rice? How does the quality of goods come into the equation? How do you determine which commodity gets how much of which commodity and why? All these loopholes led to the fall of this system of exchange which was replaced by a more reliable and simple one, money. Barter is effective, it’s still used today at many places for example- If India needed to import Onions from Australia, they can provide them with Mangoes of the equal value, but we need to admit that it can be done only for a limited range of things, it cannot form the basis of a complex economy.