The introduction of money was a huge benefit in many people’s lives. Before money was invented, people had to heavily rely on exchanging goods and services using the bartering system. This led unnecessary stress due the high probability of unequal exchanges. In addition to the impracticality of unequal exchanges, many people did not have certain skills in order to get the products or services they were seeking.
However, money would give a standard of value across the economy playing field and thus would improve unnecessary hardships of the working class and also play an imperative role for the economy. The economy on a macro level relies heavily on money in order to functionally survive in order to improve civilization’s pursuit of happiness. Again, money on a macro scale is imperative for an economy to succeed in modern times, “Money also provides a convenient unit of account.
If someone quotes a price of $100 everyone will understand the value that represents. In comparison, 4.5 pounds of tungsten may have the same value, but quoting prices in tungsten is not useful as hardly any consumers can relate to the value it represents” (Simpson, 2016). This is a simple breakdown for most people to utilize a fair and equal exchange value rate. This points out the flaws of the bartering system and how unequal exchanges can be confusing when trading for goods and services. This is really important on the basis of some people not understanding what products and services are created equally when exchanging for goods and services.
Commodity is a fundamental item used by almost everyone. In the past, tea, tobacco, salt, sugar are considered as commodities. People use these commodities to exchange goods. This greater acceptability make commodities more useful to people than it was beforehand.
Even though commodity reduces transaction costs, it is not easy to carry loads of goods every time people want to make an exchange.