From Barter to Money
The barter system
Learn what the barter system is, swapping goods without money.
In the history chapters you read about crops people grew and things they made, like carnelian beads. But how did they swap these for things they needed, before there was money?
They exchanged goods or services for other goods and services. This is called the barter system: a way of exchanging things without using money.
An example: you need a pencil and have a spare eraser. Your classmate forgot their eraser but has a spare pencil. Swap! Both of you get what you need.
But notice how much had to match: you have exactly what they lack, they have exactly what you lack, at the same time. Remember this; it's the big problem with barter.
Today we use coins and notes, and also mobile phones and computers, for transactions (buying and selling). Money is the common tool everyone accepts for paying and getting paid.
Barter was the earliest way of exchanging, found all over the world. People used commodities (goods that can be traded) like cowrie shells, salt, tea, tobacco, cloth, cattle (cows, goats, horses, sheep) and seeds.
Some 'money' was amazing:
| Money | Where |
|---|---|
| Rai stones: giant discs of rock | Yap Island, Micronesia (Pacific Ocean) |
| Aztec copper tajadero: a copper 'chopping knife' | Central Mexico and Central America |
| Tevau: a coil of red bird feathers | Solomon Islands |
Rock, copper knives, feathers! Something becomes money when everyone agrees to accept it.
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