discuss different mode of exchanges in simple societies.with suitable examples?
As all human beings don’t have all the resources for their daily living and so comes the need of trade between people, groups etc. to get the commodities that they don’t have but is necessary for their living and so comes the idea of exchange which evolved over a period of time.
According to Karl Polanyi there are three modes of exchange i.e.
- Reciprocity or barter: In this form of exchange people exchanges one commodity for another, now there are three sub-divisions under it
- Generalized: In this the return isn’t expected right away and the value of the return isn’t specified
- Balanced: In this type the exchange is made with the expectations that those who give an amount will ge the same in return
- Negative: In this type exchange takes place without having to give up any value
- This type involves some sort of centralized social organization. Members of a particular group or locality collects resources or contributes to any central facility and then the central organization redistributes the times to the members of the group e.g. food bank
- Market Exchange
- This type works on the principle of supply and demand i.e. price of any commodity is identified based on the it’s supply i.e. production processes, prize of their raw material, factors of production like labor etc. and second important term is demand i.e. how many people desires it, is it urgent or the people can live without it etc.
So, in this type exchange occurs for some common mode exchange like in today’s world it is currency printed by government regulated organization like RBI in India and are legal and common form of exchange according to GoI.
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