H.Rajput-Week Five-Systems of Exchange

Societies and civilizations have the most in common while also being drastically different from one another when it comes to systems of exchange. How people have traded and bartered and created productivity has been an element of human nature since the beginning of time, but it’s how we all define value and importance that really sets us apart from one another. The different groups we looked at this week- hunter/gatherers, agriculturalists, horticulturalists, industrialists, etc. – all share a common denominator of a production/distribution cycle. Production is comprised of labor, capital, allocation of resources, and technology (which I think could fall under capital).Distribution is a very dependent component, depending on the industry it’s being used in.

Different systems of exchange contain many different venues for production/distribution of what can generally be classified as goods/services to barter systems, the markets, and the secondary market (redistribution). Simply put, in a purely competitive economy with no other unforeseeable external factors, these factors make up an economy.

However, no economy that existed in reality has ever been classified in such a manner — most of the time, hostile market conditions have lead to the formation of shadow (black) markets. Usually, these markets create a network of goods & services that are illegal/prohibited/banned. Although the market potential is huge when regulations are very lax, it gives way to dangerous practices (arms, human trafficking). However, black markets – in times of recession and economic downturn, can be crucial for basic survival needs. Other times, it might not be due to economic severity, but simply arose due to strict government legislation (1920s prohibition, modern day marijuana). In many countries, not necessarily developing, but not G10 classified either, depend on the black market to create opportunity where the local domestic market fails. In India, for example almost all legal real estate transactions are done using ‘white’ money and ‘black’ money. Black money is what’s not reported to the government or used for tax purposes.

Other systems of exchange could be classified as re distributive, unlike agriculturalists and horticulturalists’ specialties. Creating goods for direct value is what they do, as opposed to redistributing goods in a market, that a merchant has already bought at market price, and might be selling at a marked-up price.

Now, in modern day society, industrialists are responsible the bulk of economic growth. Labor has become extremely specialized, and has therefore lead to a division of labor. This can be both good and bad, as it has caused a huge upside in job growth, but it takes a lot  more to be qualified to deserve a spot. Anyone could become a hunter-gatherer, but you’d have to learn programming and coding to become eligible to contribute labor in the software developing industry. In this contemporary systems of exchange, education, race, religion, politics, etc are far more separated from the economy than they have been in the past. \

That said, there is still huge economic inopportunity based on where you’ve grown up, what social class you were raised in, how many years you spent in school, and other non-starters as well, like age, gender, and race. Usually, you can attempt to get more education based on circumstance, or climb the socio-economic ladder, but if there’s prejudice against you due to gender or race ( and even in an advanced country like America there very much is), there is very little you can do to change that. The system isn’t perfect, but social activism and awareness is changing that, so that the economy doesn’t have to suffer. Most massive crashes of debt cycles (’30s, 2008 fin crisis), affected the middle/lower class the most. This is because those who are forced to become entrenched in debt, suffer the most when they are unable to pay it off.

I’m optimistic that this is changing, but culture, society, and environment are still very much connected, may it be for the better or worse.




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