My Opinion on the Barter System

Before EFT, Paypal, and cash, the barter system served as the only method of trade. Markets were dependent on buyers and sellers coming together to establish a price and quantity of a good. Much the same as the markets that exist today, however it is also much different. The "price" referred to in today's economy is quite different from that of bartering. With money, a definite value is known. With bartering however, things become complicated as there is no set value on a certain good and thus it can make trade very difficult or unfair. Below are some of the pro's and con's of Bartering in Today's Society... These are the result of a class debate, however the verdict is yet to be reached; so your conclusion would be much appreciated.

Pros of the barter system:

• People who are willing to work may "barter" their labour in exchange for goods; encouraging hard work and healthy competition.
• In addition, it would also be more fair to the people as those who are willing to work will get rewarded and those lacking the effort will in turn lack the reward. Poetic justice, I say.
• In an ideal system, everyone wins. "one man's treasure is another man's trash" is a good way of describing this point: if a good is of no worth to you, it can always be traded to a consumer in need of that good. This again kicks out unfairness.
• As one man values his goods differently to another, poverty would be harder to establish as he may be "poor" and still significantly value his commodities.
  
• As a child, you would learn the real value of your goods and be less inclined to waste as there is no change in return for your good.
• The fact of there being no change also makes trade much simpler, as even a toddler won't exchange his lollipop for your rock (Shame on you).
• Credit card fraud would not be possible as physical goods cannot be streamed virtually in the way that real money can.

Cons of the barter system:

• Although it is mentioned that bartering can cause overall fairness in an economy, the exact opposite is also true. If a man is in desperate need of water and he only owns a car, he cannot exchange half his car for another man's water. He may be forced to wait for alternate suppliers.
• Similarly, it can make life very complicated because an equilibrium price can be difficult to establish. This is because there is simply no value with which to compare goods.
  
• Lack of a generally accepted equilibrium price would ultimately result in time wasted negotiating.
• In a modern economy, one cannot rely purely on what is present in his pocket. Savings and loans are required in any major economy, and would be nearly impossible in a barter system.
• Tangible goods may be lost due to natural disasters out of the owner's control.
• It would be difficult receiving wages/salaries as one may not have the capacity either at home, or even on his way home, to carry the payment. Whereas, the space physical money takes up is negligible.
• In my opinion, technology would be harder and more time consuming to develop, as developers and engineers would require some type of standard payment in order to make for quick and mass purchases.
• As mentioned in the comment - children of the like may be trading at an early age and being unwise and uneducated, would result in bad decisions and people taking advantage of one another.
• People of high stature may not like the idea of others being considered as well off as they are.
  

The conclusion? Simply put, there is no possibility of returning to a barter system.
As technology develops, more people's needs are satisfied, more
problems solved, and an overall increase in the standard of living takes place.
The barter system would not accommodate people's needs and wants in this society,
it is not an option. However, it can be argued that the progressive change from
the old system to the current system may have been premature. Not only has
Technology increased exponentially, but also people's perceptions have become very
shallow and their lives materialistic.