Bartering Currency Exchange! Chickens for Rice? Let's Trade!
Posted - 30 January 2012 by Escape Currency
How it all began... let's barter!
One of the earliest known forms of “trading” between men is the barter system.
The Bartering System
Bartering began at the time when societies were starting to develop and continues in many societies today. Before money was invented, ancient cultures traded items or services of equal value, such as a goat for a pig.
One of the earliest documented forms of bartering was in 6000 B.C., amongst the tribes of Mesopotamia. The Babylonians and Phoenicians further expanded trade to civilizations across the ocean.
European explorers made one of the first standard systems, trading their furs for silk in the East and their musket guns for wheat grown by the Native tribes.
The Babylonians also developed an improved system of bartering; exchanging their goods for weapons, tea, spices, and food items. Sometimes, even human skulls were used for barter.
Bartering in The Middle Ages
The Europeans started traveling across the globe during the Middle Ages and used barter services to trade their goods like furs and crafts to the East, in exchange for perfumes and silks.
On the other side of the world the natives of colonial America did not have enough money for business, so all their products and services were exchanged based on a bartering system. Most of their business consisted of trading in wheat, male deer skins, livestock, etc.
They were also experts in exchanging services. If members of one family agreed to help their neighbours in harvesting their crops, the latter would help the former in other tasks such as roofing their buildings.
The history of barter system can also be linked to the initial years of Oxford and Harvard Universities, where students used to pay their fees with food items, firewood or livestock. The invention of money did not end the bartering system completely.
Enter Money and Currency
Throughout history, barter trading has been used when money has become scarce, such as during the Great Depression and the recent World economic recession.
Adolf Hitler used a barter system to collect money for funding the war. Pre-war he was engaged in barter trading with Greece, Sweden and Russia with items such as gold, machinery and any surplus goods he encountered. Post World War II, the people of Germany too resorted to bartering, as the German currency had lost its value.
In the world of business, bartering has both advantages and disadvantages for one or both parties involved. One of the main advantages is that a barter trade gives the opportunity to save money.
Businesses that have extra products or time to perform services can exchange them for money. They can also trade their own goods and services to buy other goods and services without spending money.
Having talked about the past bartering is still alive and well. The recent recession is also helping a more creative exchange of services and goods – such as the innovative ‘Time Bank’. Here people can exchange their particular expertise and services in a controlled system which benefits all concerned.
Bartering Trade still Exists
Barter exchanges do have some challenges. Exchanges are only possible when two people have something that the other person wants… it’s only fair really!!
Tags: currency, exchange, barter, recession, forex, time bank, history of money, value
This entry was posted in History.
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