What is Bartering?

STRIDE ECONOMICS UNIT

No Money? It's hard to imagine our world

without money, isn't it? A long time ago there were no

coins. There was no such thing as money.

Before money was invented people had to get their food, clothing and other needs by trading things.

A special kind of trading…

There is a special name for this kind of trading, it is called bartering.

Bartering is the exchange of goods and services without the use of money.

Why do people barter?

People traded some of the things they didn't need for things they wanted or needed. Even then people had different jobs and skills. The good hunter might trade 10 rabbits to the carpenter for the carpenter's promise to fix his roof.

What was traded? All sorts of things

could be used as money if people agreed on their value and accepted them in trade.

In some places you could always make a trade if you had a cow.

Salt was valuable.

Salt was hard to find and very valuable to people. Everybody wanted salt to flavor and preserve their food. So salt was used for money. In ancient Rome the soldiers were paid with salt.

Do you have what someone wants? The main disadvantage of barter is

that it requires a double coincidence of wants. Both people have to have what the other one wants and be willing to swap with each other. This caused people to develop a standard for value of items.

One example was called wampum.

What is wampum? Wampum were

beads usually made from the Northern Quahog, a hard-shell clam.

Metal as Money Because beads broke and goods often

spoiled, people began using metal for money. They used copper, iron, bronze, gold and silver. Metal wouldn't get sick, spoil, or break.

Metal for money Metal could be carried around much

easier than a cow or sacks of grain! In the beginning people used lumps of metal, chunks of metal, and metal in all shapes and sizes.

The heavier the piece of metal was, the more you could buy with it.

Money, money, money!!!

People decided to weigh a piece of metal once and make a mark on it that told how much it weighed. Then the metal would not have to be weighed every time it was traded. Now everyone could look at the piece of metal and see how much it was worth. Pieces of metal that were weighed and marked this way were the first coins.

Are there problems with bartering?

What happened when you had something to trade but nobody wanted it?

What happened if the traders couldn't agree on what was a fair trade?

?’s to ponder while working in your paper hat company:

Resources Econopolis http://library.thinkquest.org/3901/

Wampum Works http://history.howstuffworks.com/native-american-history/wampum.htm

Bartering for Goods http://fi.edu/pieces/knox/barter.htm

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