What are the Advantages of the Barter System?
By BYJU'S Exam Prep
Updated on: November 9th, 2023
The Advantages of the Barter System are that the system is simple, there is no problem with international trade, and there is no question of under-production. Furthermore, natural resources are not overexploited, and the wealthy cannot store commodities to increase their economic power. There is also proper labor division.
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Advantages of the Barter System
There are several reasons that make the barter system beneficial. These are mentioned below.
- Simplicity: Barter System is free from the complex problems of the modern monetary system. Thus making it simpler to use.
- No question about unemployment: With the implementation of the Barter System, the demand for goods and services was meeting societal needs, and there was no question of over-hill employment or unemployment.
- No problem with International trade: In the Batter System, the problems like the adverse balance of payments and foreign exchange crisis does exist.
- No real concentration of power: There is no possibility of storing the commodities in a Batter System. Thus, there is no such problem of extreme economic power concentration.
- No overexploitation of Natural Resources: People in the barter system try to manufacture or produce their own goods for utility. They maximize the use of personal and natural resources while avoiding greedy exploitation or waste.
- Proper division of labor: The Barter System brings in the benefits of division of labor.
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