Page 11 - Countertrade
P. 11
Limitations of the Old Barter System
Indivisibility of commodities:
It is often difficult to measure and divide a commodity without loss in
value. In most cases either the commodity is indivisible or requires a
consensus to be reached.
Absence of Store Value:
More often than not wealth cannot be stored in bartered goods, as most
of the commodities are perishable in the long run and non-monetary.
Absence of Standard Value:
Since there is no medium available to value a commodity, reaching a
consensus on its value is difficult. How much is to be exchanged for
another commodity is a problem and as such one party is likely to suffer
through the exchange.
