barter could not materialize. For instance ‘A’ is having a surplus of groundnut and ‘B’ is possessing rice in surplus. In this case A should be in need of rice possessed by B as the latter should desperately need groundnut possessed by A. If this “coincidence of wants” does not exist, Barter cannot take place.
commerce - - . . PM . Non – existence of common measure of value Barter system could not determine the value of commodities to be exchanged as they lacked commonly acceptable measures to evaluate each and every commodity.
It was difficult to compare the values of all articles in the absence of an acceptable medium of exchange. . Lack of direct contact between producer and consumers It was not possible for buyers and sellers to meet face to face in many contexts for exchanging the commodities for commodities. This hindered the process of barter in all practical sense.
. Lack of surplus stock Absence of surplus stock was one of the impediments in barter system. If the buyers and sellers do not have surplus then no barter was possible. Invention of Money All the aforesaid constraints were addressed by the invention of money as medium of exchange.
Besides there are other hindrances in the smooth exchange of goods from the place of production to the place of consumption like place, time, risk, knowledge, finance and so on. These are addressed by various mechanisms in detail in the subsequent sections of this chapter. . Hindrances of Commerce Production of goods and services for the satisfaction of human wants is the main objective of an industry.
Reaching those goods and services to the people for where these are produced is the object of commerce. Commerce serves as a valuable link between the producer and the consumer. It renders a variety of services to ensure that the passage of goods and services between the two, is completed without any let or hindrance. Accordingly, commerce may be defined as “the organized system for the exchange of goods and services between members of industrial world.” It comprises all