Money itself is nothing. Essay Example

and services, such as weaponry, food, or tea. One problem that was discovered with the barter system in areas such as Mesopotamia was that there was no way to assign a specific value to the goods and services that were being traded. One of the most popular things traded in the barter system was salt because it was so valuable. Bartering grew and flourished as people began to travel more during the Middle Ages. The barter system began to be more successful as there were new goods and services being introduced.

The Europeans introduced new things into the barter system market that Americans didn’t have access to and also didn’t have the money to afford. During the Great Depression, the barter system began to grow even more rapidly than it had been. The Great Depression is one of the most significant time periods throughout the history of bartering. Money was scarce and people had a difficult time getting what they needed. It allowed people to get food or clothing when they needed to and they were allowed to create accounts with businesses.

Traditional economy

A traditional economy is a system where traditions, customs, and beliefs shape the goods and products the society creates. Countries that use this type of economic system are often rural and farm-based. Also known as a subsistence economy, a traditional economy is defined by bartering and trading. Little surplus is produced, and if any excess goods are made, they are typically given to a ruling authority or landowner. Hunting, gathering, and cultivation are the main tasks for workers in a traditional economy. There are big parts of the

world's population that still work in traditional economies, primarily in third-world countries with larger indigenous populations. Underdeveloped areas of South America, Africa, and Asia still rely on this type of economy for survival.

In many cases, a traditional economy may have no official currency whatsoever, with any available wealth going to the upper classes. As neighboring countries and influences permeate a traditional economy, the economic system can morph into a mixed, command, or market economy. In command economies, prices and supplies are determined by the government, while, in contrast, prices in a market economy are set by supply and demand. A mixed economy includes both private enterprise and some degree of government control. One advantage of a traditional economy is that each person has a function in society. Social bonds are thus deepened, people typically feel more unified with the society, and a sense of worth often increases.

Also, because goods are only made for survival, the country's natural resources may not as compromised as in other types of economies. The downside is that individuals tend to remain in set roles in a traditional economy, and their financial well-being rarely increases. Indeed, most of those living in this type of economy find themselves mired in poverty for their entire lives.

The limitations of barter Barters' limits are usually explained in terms of its inefficiencies in easing exchange in comparison to the functions of money.

• Need for presence of double coincidence of wants: For barter to occur between two people, both would need to have what the other wants.
• Absence of common measure of value: In a monetary economy,
  

money plays the role of a measure of value of all goods, so their values can be measured against each other; this role may be absent in a barter economy.

Extent Of barter Today

It is estimated that over 450,000 businesses in the United States were involved in barter exchange activities in 2010. There are approximately 400 commercial and corporate barter companies serving all parts of the world. There are many opportunities for entrepreneurs to start a barter exchange. Several major

cities in the U.S. and Canada do not currently have a local barter exchange. There are two industry groups in the United States, the National Association of Trade Exchanges (NATE) and the International Reciprocal Trade Association (IRTA). Both offer training and promote high ethical standards among their members. Moreover, each has created its own currency through which its member barter companies can trade.

NATE's currency is known as the BANC and IRTA's currency is called Universal Currency (UC).[citation needed] In Canada, the largest barter exchange is Tradebank, founded in 1987. In the United States, the largest barter exchange and corporate trade group is International Monetary Systems, founded in 1985, now with representation in various countries. In Australia and New Zealand, the largest barter exchange is Bartercard, founded in 1991, with offices in the United Kingdom, United States, Cyprus, UAE and Thailand.[citation needed] Corporate barter focuses on larger transactions, which is different from traditional, retail-oriented barter exchange. Corporate barter exchanges typically use media and advertising as leverage for their larger transactions. It entails the use of a currency unit called a "trade-credit".

The trade-credit must not only be known and guaranteed but also be valued in an amount the media and advertising could have been purchased for had the "client" bought it themselves (contract to eliminate ambiguity and risk).[citation needed] Soviet bilateral trade is occasionally called "barter trade", because although the purchases were denominated in U.S. dollars, the transactions were credited to an international clearing account, avoiding the use of hard cash.