Geography · Ch 8 — International Trade
Introduction
Introduction
Trade as a Tertiary Activity
Trade is a tertiary activity — you have already encountered this term in the chapter on tertiary activities. It refers to the voluntary exchange of goods and services between two parties. One person sells, the other purchases. In some situations, people still barter their goods directly. For both parties involved, trade is mutually beneficial.
Two Levels of Trade
Trade operates at two levels:
- National trade — within the borders of a country.
- International trade — the exchange of goods and services among countries across national boundaries.
Countries need to trade because they cannot produce everything they need themselves, or they can buy certain goods elsewhere at a lower price.
The Barter System: The Earliest Form of Trade
The initial form of trade in primitive societies was the barter system — a direct exchange of goods without using money. For example, if you were a potter and needed a plumber, you would have to find a plumber who needed pots. Then you could exchange your pots for his plumbing service.
Jon Beel Mela — Every January after the harvest season, this fair takes place in Jagiroad, about 35 km from Guwahati. It is possibly the only fair in India where the barter system is still alive. A big market is organised, and people from various tribes and communities exchange their products.
The Difficulties of Barter and the Introduction of Money
The barter system had serious difficulties — you had to find someone who both needed what you had and had what you needed. These difficulties were overcome by the introduction of money.
In olden times, before paper currency and coins came into being, rare objects with very high intrinsic value served as money. These included:
- Flintstones, obsidian, cowrie shells
- Tiger's paws, whale's teeth, dogs' teeth
- Skins, furs, cattle
- Rice, peppercorns, salt
- Small tools
- Copper, silver, gold
Salarium — The word "salary" comes from the Latin word salarium, which means "payment by salt." In those times, producing salt from sea water was unknown. Salt could only be made from rock salt, which was rare and expensive. That is why it became a mode of payment.
The photograph shows two women seated on the ground on a layer of straw, facing each other at the Jon Beel Mela. Between them, spread out on cloth, are small piles of goods — dried fish, local produce, and other items — which they are sorting and exchanging directly. There are no coins, notes, or any form of money visible. The setting is an open-air fairground, with other people and stalls likely in the background, but the focus is entirely on this face-to-face transaction.
This image is a living example of the barter system, the earliest form of trade described in the chapter. The women are not buying or selling; they are swapping what they have for what they need, without using money as a medium. The chapter explains that barter requires a "double coincidence of wants" — each person must want exactly what the other offers. Here, one woman’s surplus dried fish is being traded for another’s produce, and both benefit.
The Jon Beel Mela itself is held every January after the harvest in Jagiroad, about 35 km from Guwahati, Assam. The textbook notes it is "possibly the only fair in India where barter system is still alive." The photograph captures this rare survival of a pre-monetary exchange practice, making the abstract concept of barter concrete for students. It shows that trade is fundamentally about mutual benefit — a point the chapter stresses — and that money, while convenient, is not essential for exchange to occur.