How is the Barter system of exchange some what arbitrary?
It's arbitrary because the participants in each transaction determines the values of the items being bartered.
thank you!
You're welcome.
The barter system of exchange, which is a method of trading goods or services directly without using money, can be considered somewhat arbitrary for a couple of reasons.
Firstly, in a barter system, there is a lack of a standardized unit of value. Unlike a monetary system where currency acts as a widely accepted medium of exchange with a fixed value, barter relies on finding a mutually acceptable trade between two parties. This can often lead to difficulties in determining the relative worth of different goods or services. For example, if someone wants to trade a cow for five bags of rice, they would need to negotiate and agree on the value of each item in relation to the other. This negotiation process can be subjective and arbitrary as it depends on the perception and needs of the individuals involved.
Secondly, the barter system heavily relies on the presence of a double coincidence of wants. In order for a trade to occur, both parties must have what the other person wants and vice versa. This can make the process of finding a suitable trade quite challenging, as it requires individuals to search for someone who has what they need and simultaneously needs what they have. The lack of a standardized medium of exchange, like money, makes it more difficult to facilitate transactions and can lead to inefficient exchanges.
Overall, the barter system is somewhat arbitrary due to the absence of a standardized unit of value and the requirement of a double coincidence of wants, which can make determining trade values and finding suitable exchanges more subjective and challenging.