Storyyogi Money Matters # 3 – Barter Trade

Hi friends! It was nosy mice’s birthday and he had invited all his friends for the birthday party. I was having a great time. Nosy’s grandparents too were present. Grandparents are so adorable. They treat their grandchildren with so much of love and affection. Above all they are so much full of great experiences and are a big reservoir of knowledge.

The dinner was served and we all started feasting over the delicious food. Suddenly Nosy’s granny said, “Nosy, you know something? We were never given pocket money by our parents but we would always find new toys to play. We used to “barter” our toys with our friends and be happy with the exchanged set of toys. Then as we grew up, we studied in our history class that this type of exchange was called as the “barter trade”. Nosy smiled at his granny and quickly acknowledged. “Yes granny! I have read about this in a book and I was amazed with the fact that trade was possible then without currency.” My ears twitched after listening to all this and I very proactively asked Nosy on what is barter all about. This is what he had to say :

[balloon-r] “Barter? What is it? Never heard about this?” [/balloon-r][balloon-l] “Don’t you worry my friend I will tell you everything about barter trade. Many, many years back when money was not invented people would exchange goods against goods i.e. if they wanted “rice” they would exchange it against “wheat” or “sugar” etc. with the other trading party. It is nothing but just an exchange of goods carried out between two or more people. This kind of exchange of goods is called as barter exchange. Like for e.g. You have ten pencils and I have ten pens. You need four pens and you need some five pencils. So will exchange the five pencils with my four pens. This is called as barter exchange.”[/balloon-l]

[balloon-r]But Nosy, does that mean that you can exchange anything and everything? There must be some rules for carrying out the trade. Do you know any of the rules?[/balloon-r]
[balloon-l]Yes of course there are rules. Some of them are like:
• The trade should be a fair trade i.e. when you write correct answers in a test and the teacher gives you the correct marks thus those marks given are fair marks. Which means she has not given neither a less nor a more score, she has given just a right score, a correct score.
• Exchange should be between goods of good quality. Like for e.g. If you want to exchange a broken toy with my brand-new toy then it is not a correct or fair barter trade.
• Both the parties should agree for the exchange, it cannot be by force or disagreement.
e.g. You cannot force me to exchange just because you want to exchange. It is me who also would be wanting to exchange and not just do it against my wish or for your convenience.
• Lastly, there were services too exchanged in barter system. By services I mean, you want your books to be covered and I want my shelf to be cleaned. So, we can barter the covering and cleaning services with each other.

[balloon-r]Wow my friend Nosy! This surely is a fun trade, especially for kids, I can barter lots of toys and books with you. Don’t you think so? Works well isn’t it? This is a new way of trade that too without money. Can you tell me the history of the barter trade?[/balloon-r]
[balloon-l]Sure, the history of barter dates to 6000 BC. It was introduced by Mesopotamia tribes. Slowly, this trade flourished across the world. In the middle ages, the Europeans travelled around the globe to barter goods of their land with the specialities of the other land. Don’t forget my friend yogi, the barter trade was totally done based on approximation. It was always a near accurate exchange.[/balloon-l]

[balloon-r]Then this would have led to lot of fights or disagreements, right? Why did this trade stop?[/balloon-r]
[balloon-l]Yes, sometimes. But since it was mutually agreed trade there were less disputes. After a few years, money was invented and people believed in trading with money exchange as it was accurate. The barter trade did not die it just became a less used trade option.[/balloon-l]

[balloon-r]Thanks a lot, Nosy! With you I was on a learning spree of basic money matters. But this, surely is something which is different and takes you back to the good old days. As always you have enlightened me with another new topic on money. I will be leaving now. Thanks for the cake ! I will now go home and see what I can barter with my cousin,Willy. He always fools me with his old toys and takes my new ones. Now I know the rules I can very well tell him of the rules of barter trade. Bye! See you soon.[/balloon-r]

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