How come today's society cannot make the barter system work?

Question

How would it effect the economy either in negative or positive way (s)?

Answer 1

The barter system was ultimately abandoned because it was extremely inconvenient.  Gold was used as money for centuries because it had a high value to weight ratio and could be cut into arbitrary portions and amounts.  This made it an ideal form of money.  If you wanted to trade a cow for something you can't very well cut the cow in half or quarters and expect it to retain the proportional value of the original cow, so you would have to trade for the value of a whole cow.  What if the seller doesn't have that many goods or you don't want that many goods or the seller is a vegetarian, what then?

As you can see bartering takes a lot of organization and cooperation between parties.  There is more to think about then simply "let's trade this for that?"  In the end people will always want to barter for something that will be accepted by everyone.  We call that money.

Answer 2

The fall of the barter trade system was mainly due to the lack of adequate valuation of goods. Lets say you have a chicken, how do you know how many chairs its worth (if that's what you want in return). Paper money is merely a way to give values to products and thus make it easier and more fair when trading. The return of barter trade would be a step back and an injustice.  

Answer 3

the barter system would work as it has in the pass before cash. the only problem is government's want there cut (tax) and you cant store food etc as well as you can cash.How el's would M.P's get there perks such as travel expenses,meal allowance's,chauffeur  driven cars on call 24/7? just to mention a few perks.

Answer 4

Bartering works, only when the individuals involved practice honesty and equality.

Dont be GREEDY

Answer 5

Barter system has high transactional costs, high information gaps, large inefficiencies...

It is not that it cannot work, the problem is that it is more expensive and less efficient, so why would we want to use it?

Answer 6

Just look at what walmart is doing to the society, driving everything down the drains.  

Answer 7

I would say there are 2 answers to this:

1 - The more widespread use of a common currency

2 - The rise in overall income.

If you barter there has to be dual agreement on the value of the goods that your bartering for. With a common currency this is alleviated since you both agree on the value of the currency.

    The rise in incomes is also significant. As people are richer they are less willing to barter down prices, since they can still reasonably afford to purchase goods without having to barter prices down. If you think about what percentage of a household's income would be taken up by meat now compared with a typical household in the 1600's. In the 1600's when budgets were smaller meat and food in general would have taken up a larger amount of their income than today, hence they would have bartered to get the price as low as possible, whereas today we simply walk into Tesco with all their cheap prices.

Hope that helps.