- Barter system: Exchange of goods and services directly without using money.
- Cumbersome and time-consuming.
- Required double coincidence of wants.
- Limited specialization due to difficulty in evaluating the values of different goods.
With the Invention of Money (Barley, then Silver and Gold Coins):
- Facilitated specialization and division of labor: Allowed individuals to focus on producing specific goods or services, improving efficiency.
- Medium of exchange: Simplified trade by providing a common unit of value.
- Prices could be easily compared, making transactions faster and more convenient.
- Facilitated long-distance trade: Merchants could carry money instead of bulky goods, reducing transportation costs and risks.
- Standardization: Coins had consistent value, eliminating disputes over the worth of goods.
- Stored value: Money could be saved for future purchases or investments.
- Facilitated the development of credit and banking: Money's stability allowed for the creation of lending and borrowing systems.
Impacts of Money in BC:
- Rise of complex economies and commercial activities.
- Led to the development of larger and more sophisticated markets.
- Contributed to urbanization as people moved to centers of trade.
- Spurred innovations in record-keeping and accounting.
- Facilitated the growth of specialized occupations, expertise, and skills.
- Promoted international trade and cultural exchange.
- Influenced political and social structures by concentrating wealth and power.
- Shaped economic theories and practices that persist today.