The history of economy is as old as humans them selves. As soon as people started to interact with each other they started to make goods first for them selves then later in need for other goods they could not make them selves but other people could make them. In the first markets people were meeting each other and change all the goods they made or purchased for another goods with their neighbors. This type of trade is called barter. Even after invention of money barter has steel some place in our society today.
What is Barter?
Barter is often regarded as an old-fashioned means of exchange that was superseded because money is far more efficient. After all, in a monetary system an apple grower who needs shoes simply has to find a cobbler. In a pure barter system the apple grower would have to find not just any cobbler but one who happened to want apples at that time. However the inconvenience of barter was just one factor, and in most places was probably not the most significant one. Barter has, undeservedly, been given a bad name in conventional economic writing, and its alleged crudities have been much exaggerated (Rev. ed. Cardiff, p.10). Barter and money are not necessarily completely incompatible. One of the most important improvements over the simplest forms of early barter was first the tendency to select one or two particular items in preference to others, so that the preferred barter items became partly accepted. Because of their qualities in acting as media of exchange although, of course, they still could be used for their primary purpose of directly satisfying the wants of the traders concerned. Barter still often plays an important role in trade with countries whose currencies are not readily convertible, e.g. the communist countries during the cold war. At the retail level barter has become the main means of exchange on occasions when currencies have collapsed completely as a result of hyperinflation, e.g. in Germany after the two world wars. In normal circumstances retail barter is much less important but its persistence has puzzled some economists (A History of money from ancient times to the present day. Rev. ed. Cardiff: University of Wales Press, 1996). After people were used to barter they realized they needed some other monetary system to trade goods, because it was impossible to make any trade with shoemaker if one wanted a new shoes and had for example apples if shoo maker did not want apples.