THE BASIC OF TRADEEven in the most primitive societies the great majority of peoplesatisfy a large part of their material needs by exchanging goods andservices. Very few people indeed can make for themselves everything they need all their food,their clothes,their housing and their tools.Ever since men started living in communities, they have been satisfying theirneeds by means of specialization and exchange; increasingly eachindividual has concentrated on what he or she can do best,and has produced more than he can consume himself of these special goods or services. He has supplied other members of community with the surplus,and in exchange he has acquired the things he needs which other have produced.
The more advanced the community,the more complicated does the dual process of specialization and exchange become. In primitive communities there will only be few good or services produced; they will be exchanged by barter. In more sophisticated societies, the range becomes very much greater, and it becomes necessary to have a special mechanism to regulate the exchange of goods and services. This special mechanism we call "money". And again, as society becomes morecomplex, the types of money and the ways in which buyers and sellersare brought together become more and more intricate, and so we have evolved the vast network of world trade that exists today.But how ever complicated the system, the principle behind it is exactly the same as it isin the primitive village community where some of the men hunt andother fish,while the women weave cloth-and where these simple goodsare exchanged so that everybody has something to eat and something towear.
EXERCISE
A.Complete the following sentences by marking the right letter: a,b,or c.
1. In order to live
a.People with the exception of those in primitive societies,have totrade.
b. All socictics produce all their foods,their clothes,their housing.and their tools.
c.People in all societies have to exchange their goods and services.
2.People have to trade
a. Because they have to satisfy their material needs.
b. Because they belong to the most primitive societies.
c.Because they produce all their own foods,clothes,and tools.
3. Satisfying one's needs by means of specialization and exchange implies
a.That one consumes more than one produces.
h. An increasing concentration the production of basic commodities.
c.Concentration on what one can do hest,and producing more thanone consumes.
4.The dual process of specialization and exchange will be complicated
a.When only a few goods and service are produced.
b. When the range of goods and services is vast.
c. As soon as a special mechanism is used to regulated the exchangeof goods and services.
5. In the process of evolving the vast network of world trade existing today
a. This special mechanism called money has become anything but valuable.
b. This system of specialization and exchange is most needed in the primitive village community.
c. The types of money and exchange become more and more complicated.