Commerce

Commerce

Some commentators trace the origins of commerce to the very start of communication in prehistoric times. Apart from traditional self-sufficiency, trading became a principal facility of prehistoric people, who bartered what they had for goods and services from each other. Historian Peter Watson dates the history of long-distance commerce from circa 150,000 years ago.[2]

In historic times, the introduction of currency as a standardized money, facilitated a wider exchange of goods and services. Numismatists have collections of these monetary tokens, which include coins from some Ancient World large-scale societies, although initial usage involved unmarked lumps of precious metal.[3]

The circulation of a standardized currency provides a method of overcoming the major disadvantage to commerce through use of a barter system, the “double coincidence of wants” necessary for barter trades to occur. For example, if a man (or woman) who makes pots for a living needs a new house, he/she may wish to hire someone to build it for him/her. But he/she cannot make an equivalent number of pots to equal this service done for him/her, because even if the builder could build the house, the builder might not want many or any pots. Currency solved this problem by allowing a society as a whole to assign values[citation needed] and thus to collect goods and services effectively and to store them for later use, or to split them among several providers.

Today commerce includes as a subset a complex system of companies which try to maximize their profits by offering products and services to the market (which consists both of individuals and other companies) at the lowest production cost. A system of international trade has helped to develop the world economy but, in combination with bilateral or multilateral agreements to lower tariffs or to achieve free trade, has sometimes harmed third-world markets for local products, it has been argued.[by whom?] (See Globalization.)