What are the problems of barter exhange

  1. profile image47
    jhoseeposted 7 years ago

    What are the problems of barter exhange

  2. Subrisus profile image57
    Subrisusposted 7 years ago

    I don't think that there is necessarily anything wrong with barter.

    A currency-based system of exchange is essentially a barter system. Except that just about everyone is willing to barter for currency. This makes the system more efficient because it allows you to go to a store and be confident that they will be willing to take what you have (currency) for what they have (goods and/or services).

    Without currency, you wouldn't have that assurance. In addition, currency is easy to deal with (especially since the advent of credit). It's a  lot more convenient to walk around with a bank card then it is to walk around with a herd of goats (or whatever else you may have to barter with - I'm not sure why I used a herd of goats as my example, might have been a Freudian slip).

    But there are issues with currency too. Currency only has value as long as people believe it has value. If that confidence fails, then the currency becomes worthless and the whole system fails (post WWI Germany comes to mind).

 
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