Difficulties
of barter system
1-
Bilateral incompatibility of necessities
The main
difficulty in direct exchange was that the needs were not mutually exclusive. For
example, a person produces wheat and needs cloth. Take wheat and give me cloth
instead. Now, if the clothier needed wheat, he would take the wheat and give
the cloth, but if he did not need the wheat, he would refuse to give the cloth
and say to him that I need such and such thing take it.
In this way,
the wheat owner used to find someone who was ready to take the wheat and give
him the desired item.
2- Lack
of common standard value
In
the form of a direct exchange in this way, people get enough cash; It used to
happen and the transaction was not easy. In this way, many times one person
would give a large amount of goods to another and receive a small amount of
goods in return, and one of the two would suffer a loss in the transaction.
Now money has
solved this problem and everything is transacted through money...
3-
Difficulty in storing value
One of the
main difficulties of direct exchange was that things could not be stored. In
general, things were perishable, so they could not be collected, so people had
to use them anyway and could not store them. Today people become rich byhoarding their wealth, but back then their wealth was the things they produced,
so they had to be spent anyway and could not be hoarded...
4- Not
being able to distribute certain items
One of the
problems of direct exchange was that some items were not distributed, so there
was a lot of difficulty in the transaction.
5-
Difficulty in loan transactions
Borrowing
transactions in direct exchange were very difficult because under the barter
system borrowing transactions are in the form of commodities, while with the
passage of time the country's political and economic conditions change in the
importance and value of the 'produced' commodities. ...Therefore, there are
fears of return of the object, 'resentment of Adigi', quarrels and mutual
differences...
6-
Difficulties in transferring wealth
In direct
exchange, there were significant difficulties in the movement of goods from one
place to another. Since wealth includes goods such as grain, cattle, houses,
shops, fruits, vegetables, etc. Significant difficulties and expenses had to be
borne while money can be easily transferred from one place to another.
7-
Difficulty in payment of service fees
Apart from
goods, since people used to get services from each other, payments for these
services were very difficult. Similarly, how could a cobbler get compensation
from a lawyer for his shoes, etc.
8-
Problems of government receipts and payments
In the
absence of money, government receipts and payments faced many difficulties because
receipts were in the form of commodities...which were very difficult and
expensive to acquire, transport, store and monitor.
while on the
other hand the government officials Payments also had to be made in kind, and
in this context bilateral incompatibility 'absence of any instrument of common
measurement of value and certain commodities being perishable or indivisible.
Being used to create problems. An effective
and viable alternative to the barter system was necessary to overcome these
difficulties.
Also read this :
How should the relationship with Allah be
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