You are already familiar with the term “trade” | Class 12 Geography Notes

You are already familiar with the term “trade”

Trade is a tertiary economic activity involving the voluntary exchange of goods and services between two parties. One party sells, and the other purchases, making trade mutually beneficial. In some traditional societies, barter—the direct exchange of goods without money—is still practiced. For example, a potter needing plumbing services must find a plumber who needs pots to exchange goods directly. This system, however, has limitations such as the need for a double coincidence of wants. Trade occurs at two levels: national and international. International trade involves the exchange of goods and services across national boundaries. Countries engage in international trade to obtain commodities they cannot produce themselves or can buy more cheaply elsewhere. The barter system was the earliest form of trade in primitive societies, but it was replaced by money to overcome difficulties such as lack of a common measure of value and divisibility. Before the advent of paper and coin currency, rare objects with intrinsic value like flintstones, obsidian, cowrie shells, tiger's paws, whale's teeth, animal skins, cattle, rice, peppercorns, salt, small tools, copper, silver, and gold served as money. For instance, the word 'salary' comes from the Latin word 'Salarium,' meaning payment by salt, reflecting salt's high value in ancient times when it was rare and expensive.

📊 Diagram: Figure 8.1 shows two women practising barter system in Jon Beel Mela, illustrating direct exchange of goods without money.

🧪 Activity: Observation of barter system in Jon Beel Mela where people exchange products without money.

🔗 Connection: Leads to the historical development of international trade and the introduction of money as a medium of exchange.