Navigation
Learning how people exchanged things before money was commonly used.
Imagine you have a delicious snack, but you really want a cool sticker. If you don't have any coins or dollar bills in your pocket, how could you get that sticker?
Long ago, before people had coins or paper bills, they used something called bartering. Bartering is when you trade something you have for something someone else has. You don't use any money at all! You might trade a good, which is a physical thing like a toy or a piece of fruit. Or, you might trade a service, which is a job you do for someone, like raking leaves or cleaning a room. To barter, both people must agree that the trade is a good idea. It is a way for everyone to get what they need by sharing what they already have.
Let's look at a simple trade between two friends: 1. Leo has extra yellow pencils. 2. Maya has blue eraser that Leo really likes. 3. Leo asks, 'Will you trade your eraser for my pencils?' 4. Maya says 'Yes!' because she needs pencils for class. 5. They swap items. This is a successful barter!
Quick Check
If you help your neighbor pull weeds in their garden and they give you a glass of lemonade, is that bartering?
Answer
Yes, because you traded a service (pulling weeds) for a good (lemonade) without using money.
For bartering to work well, the trade needs to be fair. A fair trade means that both people feel like the items they are swapping have about the same value. If you trade a tiny pebble for a giant, brand-new bicycle, that probably isn't fair! People have to talk and negotiate to decide what is fair. Sometimes, you might need to give more than one item to make a trade equal. For example, you might trade small stickers for large holographic sticker.
Sam wants a soccer ball from Kim. 1. Sam offers trading card. 2. Kim says, 'No, a soccer ball is worth more than card.' 3. Sam offers trading cards instead. 4. Kim agrees that cards is a fair price for the ball. 5. They make the trade.
Quick Check
Why might someone say 'no' to a barter offer?
Answer
They might say no if they don't think the trade is fair or if they don't need the item being offered.
Bartering is great, but it can be tricky! To barter, you have to find someone who has exactly what you want and who wants exactly what you have. This is called a 'double coincidence of wants.' Money makes this easier. Money is a tool that everyone agrees has value. Instead of carrying around heavy bags of apples to trade for shoes, you can just use money. Money acts as a middle step that allows us to buy exactly what we want, whenever we want, from anyone.
Imagine this problem: 1. You have a book and want a toy boat. 2. Sarah has a toy boat, but she wants a hat. 3. Tom has a hat, but he wants your book. 4. To get the boat, you must first trade your book to Tom for the hat, then trade the hat to Sarah for the boat! 5. If you had money, you could just sell the book and buy the boat directly.
What is the main difference between bartering and buying things at a store?
Which of these is an example of a 'service' you could barter?
In a fair trade, both people should feel happy with what they received.
Review Tomorrow
Tomorrow morning, try to explain to a family member what 'bartering' means using the example of your favorite toy.
Practice Activity
Play a 'Trade Game' with a friend. Gather 3 small items each and see if you can make a trade that makes you both happy!