Good morning here happy new week, in my acute research in I came about this article I was wrote in 2017 as per a paper about the failure of the barter system.
Money has been defined by alot of scholars through out history in diverse of ways.
Walker say " Money is what money does" in other words anything that perform the function of money". Chandler "money is what the law says it is '. He disregard that money is anything that serves as a means of exchange if the law prohibits it's use for the purpose . In line with Chandler argument the legal definitions are unsatisfactory for economics analysis, as people may refuse to accept things that are legally defined as money . Chandler conclusion was that legal provision are necessary, but not sufficient, to determine things that do or do not serve as money.
The historical stage of money originated from the barter system where production is limited and surplus output is also limited . The barter system is based on the exchange of goods either for good or service . And this kind of economy a barter produce almost all the required for basic existence himself. Several problems arise from the barter system as :
Lack of common unit of measure:-
Inventory of any kind of various goods can only be ascertain by listing the different commodity that made up the inventory .i.e goods can't be measured with price only their numbers.
Double consciousness of want
Since it was an operation in a small economy similar or close similar goods are produce by almost every one and other want would be very scares to get at particular time.
Storage of wealth and specialization
Commodity as cattles require large space to store and they are not easily liquid. This system also disregard specialization since only everyone had to produce their basic needs.
However the evolution from barter system of money evolve through different time unto,our present state where we have different medium as barter evolve to cowries, sea shell and other exchanges to Gold , silvers to bank note which was originated from the black Smith and coins etc.
Money is believe to have some function, as the basic purpose of money is to serve as the great wheel of circulation . Economists recognize four major function. As medium of exchange,a unit of value , a store of value and a standard of deferred payment.
Characteristics of money to money to perform it's function satisfactory.
Generally acceptable For money to be called money it has to be accepted between all and sundry. Bother the seller and the buyer but be able to accept these. In the barter system exchange of goods for services is a crucial aspect to determine on term of value which is not easily measured.
Durability in essence something that cannot die . Money must no be a living thing that can possible die or expire as time goes on.
Divisibility.
Money should have a smaller unit in order for payment which could be made in different amount. In barter commodity are not easily divided.
portability Money should be easily and convenient to carry about. As barter system do not guarantee easy and convenient carriage .
Homogeneity This means that every value of money is the same and identical every where. In barter system the shape, height , weight of a commodity are very different in all circumstances as they are very is one problem here.
Scarcity certain restriction has to be put in placed to determine the supply of money.
Stability Money must be stable over on time , as it purchasing power most not be easily manipulated. The barter system cease to exist since it couldn't provide the above function.
The failure of barter system is due to a lot of things as individuals, trader have to exchange good and services with different people and certain individual begins to explore different part of the world and human move in into the quest of discovery. Today barter system may still exist however it is not every common as so many years ago has money has even begin to evolve into new view.
When the pandemic started and people are asked to stay at home, other lost their job so a handful of people resorted to the barter system. It's good to return the old way of doing things. There's a news I watched a month ago about a woman who is taking care of her sick mother and due to the pandemic, she was laid off at her previous job, she can't buy medicine and milk for her mom so she exchanged some citrus fruits for medicine and milk.