Mada za sehemu hiiThe Scope Of CommerceMada 5
- Nature and the subject matter of commerce
- Commerce flow chart
- Importance of commerce
- Distinction of commerce form Economics
- Development of Commerce in Tanzania
- Ancient Times (Stone Age, Primitive Communalism): During the Stone Age, commerce did not exist in Tanzania. People lived by collecting wild fruits, digging roots, and hunting animals using stones. They didn't have any wants to satisfy beyond what their family or clan could provide. Each family was self-sufficient and self-reliant. There was no social division of labour or specialization.
- Discovery of Fire: As time went on, fire was discovered. With the discovery of fire, people began melting iron and making tools such as spears, arrows, and hoes. This led to significant changes in how people lived and worked.
- Emergence of Hunters and Farmers: A group of people who used spears, arrows, and bows for hunting wild animals were called Hunters, while those who used hoes for cultivation were called Farmers. This marked the beginning of people performing different types of jobs.
- Development of Division of Labour and Specialization: The separation of people into Hunters and Farmers was the beginning of division of labour. It also marked the early stages of specialization and interdependence, as people depended on one another for goods and services.
- Beginning of Barter Trade: As specialization grew, people started exchanging commodities they produced with those produced by others. This exchange of goods without the use of money was known as barter trade. It was the early stage of trade in Tanzania.
Barter trade is the exchange of goods for other goods without the use of money.
- Low risk of theft: Goods are harder to steal and identify than money, making barter safer in insecure environments.
- Stable value of goods: The value of physical goods tends to remain stable over time, unlike money which may lose value due to inflation.
- Useful where money is scarce: In areas where currency is limited or unavailable—such as rural communities—barter serves as a practical means of exchange.
- Avoids inflation problems: Since barter does not involve money, it is not affected by inflation, which can reduce the purchasing power of money.
- Encourages local trade: Barter promotes direct trade within communities, strengthening local economic relationships.
- Simple and direct exchange: Barter allows for immediate exchange of goods without involving banks or complex financial systems.
- Lack of double coincidence of wants:
For barter trade to occur, each party must have what the other wants and be willing to exchange it. If a person with wheat wants salt, they must find someone with salt who also wants wheat—this is often very difficult. - Lack of a measure of value:
It is hard to determine how much of one good should be exchanged for another. For example, deciding how many kilograms of maize should be exchanged for a cow is complicated. - Lack of store of value:
Barter makes it difficult to store wealth, especially in the form of perishable goods like vegetables or tomatoes, which cannot be kept for a long time or used in future exchanges. - Indivisibility of some items:
Some goods cannot be divided into smaller units for exchange. For example, you can't divide a cow to exchange it for smaller items like a bag of rice or some clothes. - Difficulty in transportation of goods:
Many barter goods are bulky, heavy, or perishable, and due to limited or no modern transport systems, moving them from one place to another for exchange is difficult. - No standard of deferred payment:
In a barter system, it is hard to make agreements for future payments or credit transactions, because there is no standard measure for deferring payments over time.
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