Why does the US no longer use the barter system as its economic system?

Answer 1

Bartering only works when each party has something that the other wants. For example if I own a printshop and a dog, then I might find a groomer who needs printing (perhaps some forms or business cards, for example). The printshop owner could offer printing some cards for getting the dog groomed. But what happens if it is time for the dog to be groomed again, but the groomer is not ready to order some more cards. The need/want is only on one side of the transaction, so the barter will not happen in this case. There are barter groups or clubs that will assist with finding suitable transactions. See the article in the related link, below.

Answer 2

I feel that the key thing is the invention of a standard unit, for example the dollar in the US. Bartering seems to be more associated with trading pigs for chickens as there is no standard comparison.

Business likes to control their variables. For one, bartering leads to unneeded pressure on the sales staff. Instead, businesses like to use promotions and discounts in order to make the customer feel like they are getting a deal.

Answer 3

Barter is a very hard way to trade goods. Basically, if you want a chicken, let's say, you had to find someone that was willing to sell a chicken for something that you were willing or able to offer them in return. Because of this convergence of mutual wants and needs, barter is very rare.

That is why the money system was developed. In modern day, we are able to hand over a 5 dollar bill and receive 5 dollars worth of goods, therefore getting what you want for something that the other person wanted or could use. The person you bought these goods from can then turn around and take that same 5 dollars, and buy something they want. And the cycle continues on and on, without the need for mutual wants that barter requires. It is a much more efficient, useful form of money.

Answer 4

Bartering is still used in the business world, simply on a much smaller scale. Money is more useful than barter in most cases, though, since money is exchangeable for any desirable good or medium. Barter is only useful if both parties want a good or service that the other party can render. As a result, unless two businesses actually wish to exchange goods for less than market value, they will opt to do a transaction valuated in currency.