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Sarkar on Trade and Barter

Question: Say whether barter trade is suitable for an advanced country or a backward country -- a developed, developing or undeveloped country?
Answer: It is suitable for a developing country, but not where the number of surplus goods -- say raw materials -- is limited or few in number. Bangladesh has a surplus in jute and hide. For that country, barter trade is suitable. Where the number of surplus goods is not much, barter trade is not required.
-From “Questions and answers”, Prout In a Nutshell 18

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The meaning of the Sanskrit root verb krii is "exchange". An exchange may be undertaken through either money or commodities. Suppose I give someone a kilogram of rice and I get two kilograms of vegetables in exchange. This is called a "purchase". Again, suppose I give someone some cash and in exchange I get a certain amount of vegetables, say spinach. Both these transactions come within the scope of "purchases". In ancient Bengal, the exchange of commodities through barter was more popular than exchange through money. In a village market near Bolpur in Birbhum district, I once noticed a carpenter who came to sell yokes and ploughs. He returned home with a brass container in exchange for a yoke. In reply to my question, "How much did it cost you?" he said, "I got the container in exchange for my yoke." The practice of the mutual exchange of commodities in foreign trade is called "barter trade". In foreign trade those countries, which have a large volume of very few commodities to sell but many commodities to buy, will find barter trade profitable. Otherwise their reserves of gold bullion may get exhausted very quickly. Barter trade is advantageous for countries like Indonesia, Bangladesh, Malaysia, Kampuchea (Kamboja in Sanskrit) and Tibet.

Ancient Bengal had a large number of commodities to sell but very few to buy, yet the Bengali merchants were fond of barter. (In ancient Bengal much barter was conducted by the Gandhaban'ic and Suvarn'aban'ic communities, but other merchants also took part.) The reason for this preference for barter was that Bengal had a highly developed ship industry. The Bengali carpenters and fishermen were very proficient in marine industries. The merchants used to take their commodities overseas in order to sell them. Had they carried on their business with money, they would have had to sail their large ships back empty. But as they were engaged in barter, they also returned with commodities. This was one of the main reasons for the popularity of barter in Bengal in those days. Regarding the flourishing barter trade of Bengal, it has been said,

Kuranga badale lavanga nibo kumkum badale chuya'Ga'chphal badale ja'yphal pa'bo baher'a'r badale guva'"We shall accept cloves in exhange for stag. We will accept paste for pollen. We will accept hot spices in exchange for fruit. We shall accept medicinal fruits in exchange for nuts."
The poet Mukunda Ra'm Cakravartii was a man of Ra'r'h in Bengal. In those days, the people of Ra'r'h used to send only the surplus commodities overseas for sale, and import only those commodities, which were necessary for the people of Ra'r'h, such as cloves, medicinal fruit and betel. Bengalis exported very fine rice (badsha bhog -- rice fit for the consumption of monarchs used for preparing special rice dishes) from Birbhum, Samantabhum, Senbhum, Mallabhum, Manbhum, etc., in western Ra'r'h; and muslin from Visnupur. Large quantities of black woollen blankets, fine sal furniture, Bengal gram, cotton cloth, sugar, raw sugar, copper, copper goods, mustard oil and chillies were exported from different parts of Bengal to Southeast Asia, Egypt and Europe. In exchange for these commodities, which required a large space in their ships, Bengali merchants used to bring back merchandise from overseas countries. In exchange for exports which required very little space, Bengali merchants used to bring back gold coins. In Bengal the Sinhalpatan, Tamralipta and Chattagram or Chatigram ports were very famous for trading in imports and exports. Dhumghat, Berachampa, Mahisadal, Jiivankhali (Genyokhali-Miirjapur), Nalchiti and Jhalkathi were medium-sized ports which were also used for imports and exports. This shows that ancient Bengal conducted extensive trade and barter trade.
-From Shabda Cayanika 10

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In very ancient times, that is, in the Rg Vedic period, civilization was very backward. In that age there was no such thing as buying and selling in the strict sense of the term. The system of exchange that was in vogue in those days can best be called "barter". For instance, people used to give some barley to someone (in those days people were not acquainted with wheat or rice). In exchange they would get a container. Again, in exchange for a sieve, someone would get some lentils. (In those days people were not acquainted with cowpea. They were more acquainted with legumes than with Bengal grams.) We can surmise that this system of exchange continued for a long time. Later, people began to feel some practical inconvenience because they were often not able to get the items they badly needed, and there was no ready market to sell the commodities that people produced. Under the circumstances, people converted the commodities for exchange into some kind of standard wealth to be used as needed. Thus, they began to think of media of exchange. In India, the first medium of exchange used was seashells. These seashells were the first coins. The most ancient root verb for the exchange of commodities was krii, conjugated as kriin'iite. But when seashells were first introduced as the medium of exchange, people felt the need to distinguish this new type of transaction from ordinary barter transactions. So when a transaction would be effected through an exchange of commodities, the root verb krii (with the conjugation kriin'iite) continued to be used. But when a transaction would be effected through the medium of sea shells -- the system known today in English as "buying" ("to purchase" can mean to get something through barter, but "to buy" can only mean to get something with money) -- though the same root verb was used, it was conjugated as kriin'a'te. Thus, towards the end of the Vedic Age the root verb krii became ubhayapadii, conjugated in both the above ways. Pa'n'ini, the first grammarian in the world, recognized the word ubhayapadii. Later grammarians followed his lead.

From the Gupta Age onwards barter trade between different countries continued, but in towns and cities it was greatly reduced, while the buying and selling of commodities with money greatly increased. The use of metal coins began to replace sea shells as media in an improved system of exchange. Much later still, paper notes were introduced in China. Since the Gupta Age, buying and selling has mostly been undertaken through monetary exchange. The Sanskrit word mudra' became "token" in English, meaning "something which is represented by a medium". The inner meaning of the word "coin" is also token.
- From Shabda Cayanika' 11

All excerpts Copyright Ananda Marga Publications 2004