Money And Evolution

Barter System

System Of Exchange Where Goods Or Service Are Directly Exchanged For Other Goods Or Service Without Using A Medium Of Exchange Such As Money Is Known As Barter System This System Existed In Olden Times In Olden Times People Lived A Simple Village Life And Headless Needs The Carried-Out Agriculture Exchange And Exchange Of Goods And Services Which Are Sufficient For Their Livelihood

Example Of Barter System

A Formal Cultivating Wheat Wood Keep A Part Of Wheat Sufficient For His Family And Would Exchange The Remaining To Get Rise Clothes Shoes Or Other Items Of His Needs Similarly The Shoemaker Would Get Clothes And Food By Exchanging The Shoes He Met Teachers Use To Get Food In Exchange For Knowledge And The Artist Would Be Patronized For The Entertainment Art

Limitations Of Barter System

When The Population Increased And The World Developed Socially As Well As Economically The Demand For Goods And Service Of People Changed As Well As Increased With The Rise In Industrialisation Urbanization Division Of Labour And Specialization Made In The Battle System Limited Less Applicable And Impractical Dependency And Mutual Exchange Decreased And The Personal Needs Increase The Battery System Provide Unable To Solve

Limitations Of Barter System
Issue Of Double Coincidence Of Wants And Mutual Adjustments Of Ones
Difficulties In Storing Wealth  
Problems Of Measurement Of Value

Limitation Of Barter System Are Explained Below

1 Issue Of Double Coincidence Of Wants And Mutual Adjustments Of Ones

When The World Guru Socially As Well As Economically The Need Of People Grief And Change Continuously This Met The Economics System Complicated For Example Those Who Had Risen To Exchange For Wheat Did Not Need Wheat But Clothes For The Butter While On The Other Hand The One Who Had Close Did Not Want Rice But Wanted Oil In Exchange Of Clothes The Border System Assumes Coincidence Of Wants As A Continuous Process This Coincidence May Not Hold True Always And The Dead Or Willing Ore To Exchange May Not Be In Need Of Item That The Other Tender Would Like To Exchange This Served As A Major Limitation Of Data System Search Needs Made It Difficult To Better The Rising Needs Also Provide To Be A Challenge For Establishing Butter Behaviour Between Indivisible And Divisible Goods

2 Difficulties In Storing Wealth

The Battle System Posts The Problem Of Storage Of The Exchanged And Acquired Goods Or Wealth

For Example, A Farmer Head To Store Large Amount Of Crop That 24 A Very Long Period In Order To Fulfil Even The Simplest Needs Like Shoes Or Clothes That He May Need In The Future This Become Practically Impossible

A Person Like Farmer Producing Goods In Large Volumes Had To Immediately Exchange His Goods Against Other Goods Or Services In Case He Fails To Do This He Had To Store His Large Volume Of Production For A Long Time Which Was Not Possible

3 Problems Of Measurement Of Value

 World Most Towards Division Of Labour And Specialisation Problems Of Measuring The Value Of Products Goods Or Service On Equal Bases Errors For Example It Was Easy To Exchange Wheat For Rice And Also Easy To Maintain The Rates But Economic Development Took Place Several Goods And Services Started Getting Exchange This Made Exchange Of Products Like Wheat With Other Goods And Service Difficult Problems Like If 20 Kg Of Wheat Can Be Exchanged Before 40 Kg Of Rice 10 M Of Cloth And 1 Kg Of Ghee Then How Much Cloth Can One Get For 1 Kg Ghee This Problem Post The Need Of A Common Measure Of Value Of Goods To Compare And Access The Value Of All Goods Against Each Other This Difficulties Led To The Origin Of Money  Become A Standard Measure Of Value And A Common Denomination Of Trade.

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