What are the Advantages of the Barter System?

By Balaji

Updated on: February 17th, 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 labour division.

Table of content

  • 1. Advantages of Barter System (more)

Advantages of 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 maximise the use of personal and natural resources while avoiding greedy exploitation or waste.
  • Proper division of labour: The Barter System brings in the benefits of division of labour.

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