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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.

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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