Saturday, March 20, 2010

B. EVOLUTION OF COMMERCE

commerce
commerce
Commerce includes all those activities, which are concerned with the distribution of goods and services. It embraces purchase and sale of every kind as well as various services like transport, banking, insurance, warehousing, etc. which facilitate trade. Hence, it provides link between producer and consumer. They have been expanding along with the development of society. It has passed through a number of stages to reach the present level. The standard of living id directly influenced by the degree of development of commerce. Following are the stages in the evolution of commerce:

(a) Non-Existence of Commerce and Trade : In the early stages of man there were no surplus to be exchanged. Our primitive ancestors consumed what they produced. The production of goods was only to satisfy one’s need. Since people did not exchange goods or services, commerce (and trade) was non-existent.

(b) Barter Economy : Human wants increased with the advance of civilization. They could not produce everything they needed. People came to know that man is skillful in producing a few commodities. He can make them quite rapidly in large numbers and in beautiful forms. So, at this stage people started producing excess of their needs what they could produce. People started searching for persons who could get their surplus products in exchange for those goods, which they required. Commerce made its beginning and barter (exchange of goods for goods) began to be practiced. Means of communication were either absent or wholly primitive and trade was non-existent.


(c) The Rise of Trade : The barter system was not suitable for expansion of trade. The difficulties of barter system compelled people to find out some common medium for exchange. Several commodities like shells, cattles, oxen, precious stones, metals, etc. have been used for money from time to time. Ultimately coins paper notes were evolved. With the evolution of money as a medium of exchange removed the defects and limitations of barter economy. The money as a medium of exchange helped the expansion of trade. People started producing goods for sale. A class of traders started helping the producers and consumers for exchange of goods and services. Gradually the traders started selling at particular places, which later on became market places or trade centers. So the introduction of money led to the growth of commerce.

(d) National Economy : The introduction of money followed by several other improvements of commercial activities (transportation, banking, insurance, etc.) greatly helped to develop commerce and trade. The division of work and specialization helped producers to concentrate on few products only. They started producing goods not only for the local markets but also for national markets. The specialization in different fields helped the growth of industry and commerce. The development of transport increased the trade manifold. All these developments were responsible for developing commerce at national level.

(e) World Economy : The discovery of trade routes between 15th, 16th and 17th centuries brought various countries nearer to each other. The element of specialization extended to different countries. They started exporting those products, which they could produce easily and would import those things in which they were deficit or could not produce cheaply. In this way trade extended to world markets in which good were bought and sold between two countries. This is also known as international trade. The industrial revolution brought drastic change in industrial method and industrial organization, which increased the scale of production immensely and changed the scope of trade. Several middlemen began to operate between the producer and the consumer. Specialized institution like banks, transport companies, insurance companies and warehousing were set up to help the trader. All these factors facilitated the development of worldwide trade and commerce. This is the globalization of business.

1 comments:

admin said...

A great article about evolution of commerce. Commerce is a great option to have your career in

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