Barter System Or Real Money

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About this sample

About this sample


Words: 790 |

Pages: 2|

4 min read

Published: Oct 23, 2018

Words: 790|Pages: 2|4 min read

Published: Oct 23, 2018

Table of contents

  1. Some negative points of barter system
  2. Steps of evaluation of money
  3. Cattle Currency
  4. Advantages of metal money
  5. Paper money
  6. References

Barter System is the medium of exchange between two people for the exchange of goods and services according to their needs. They complete their needs by exchanging goods and services. This system has been used for centuries before money was invented. Barter: exchange goods or services for other goods or services without using money (Oxford English Dictionary) Commodities which are used as a money. Alcohol, Almonds, Amber, Barley, Butter, Cloths, Drums, Rice, Salt, Tea, Slaves, Teeth and many more.

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The history of bartering dates all the way back to 6000 BC. Introduced by Mesopotamia tribes, bartering was adopted by Phoenicians. Phoenicians bartered goods to those located in various other cities across oceans. Babylonian's also developed an improved bartering system. Goods were exchanged for food, tea, weapons, and spices. At times, human skulls were used as well. Salt was another popular item exchanged. Salt was so valuable that Roman soldiers' salaries were paid with it. In the middle Ages, Europeans traveled around the globe to barter crafts and furs in exchange for silks and perfumes. Colonial Americans exchanged musket balls, deer skins, and wheat.

When money was invented, bartering did not end, it become more organized. Due to lack of money, bartering became popular in the 1930s during the Great Depression. It was used to obtain food and various other services. It was done through groups or between people who acted similar to banks. If any items were sold, the owner would receive credit and the buyer's account would be debited.

Some negative points of barter system

  1. Divisibility
  2. Durability
  3. Portability
  4. Sometime the value of goods are different from each other.
  5. Lack of Double Coincidence of Wants
  6. Lack of a Common Measure of Value
  7. Indivisibility of Certain Goods
  8. Difficulty in Storing Value
  9. Difficulty in Making Deferred Payments
  10. Lack of Specialization.

Steps of evaluation of money

  1. World without currency money
  2. Asian Cutlery
  3. Coins
  4. Currency
  5. Banks
  6. Money Travel
  7. Mobile Payments

Cattle Currency

The word cattle and capital come from the same word Latin that is capitalis.

  1. Standard size & weight made tea “bricks” an ideal commodity money in parts of Asia
  2. In Mongolia, 12–15 bricks would buy a sheep
  3. In Tibet, 120–150 bought one camel
  4. In some places tea bricks still circulate as a medium of exchange

People used cattle as a source of exchange. Everything is paid by the exchange of cattle like fines for murder and for everything. Food and tobacco Food and tobacco is also used as barter system but its not a good medium of exchange due to spoil, taste and many other reasons like sometimes the taste preference is difference and sometime eaten by pets. Clothes It’s a good medium of exchange because everyone need clothes to wear but people face difficulties in size and color. Every person have their own body structure and size and their own color preference. Coin Money In 600 B.C., Lydia's King Alyattes minted the first official currency. The earliest coin money was made from electrum that’s the mixture of gold and silver. The picture was stamped on it.

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Advantages of metal money

  1. Good source of storage
  2. Countable
  3. Long lasting
  4. Good source of exchange due to their size.
  5. Everyone can use
  6. Safe and convenience

Paper money

The first paper currency issued by European governments was actually issued by colonial governments in North America. Because shipments between Europe and the colonies took so long, the colonists often ran out of cash as operations expanded. Instead of going back to a barter system, the colonial governments used IOUs that traded as a currency. The first instance was in Canada, then a French colony. In 1685, soldiers were issued playing cards denominated and signed by the governor to use as cash instead of coins from France (Beattie,2015).Money Travel increased the level of international trade. In money travel, many people of different countries purchase the different currencies from different countries. Mobile Payments In 21th century, currency rise their level like now we can use mobile payments, mobile transfers, apple pay and many other transfers with our phone. This plays a very big role in our developing business. Cheque books, paper money, coin money etc.


  1. Major Disadvantages of the Barter System (2015, Feb 5). Barter System History: The Past and Present. Retrieved from
  2. Beattie.A (2015). Barter To Banknotes. Retrieved from
  3. Major Disadvantages of the Barter System (2015, Feb 5). Barter System History: The Past and Present. Retrieved from
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Barter System or Real Money. (2018, October 23). GradesFixer. Retrieved February 25, 2024, from
“Barter System or Real Money.” GradesFixer, 23 Oct. 2018,
Barter System or Real Money. [online]. Available at: <> [Accessed 25 Feb. 2024].
Barter System or Real Money [Internet]. GradesFixer. 2018 Oct 23 [cited 2024 Feb 25]. Available from:
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