Commerce

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Commerce relates to "the exchange of goods and services, especially on a large scale". [1] It includes legal, economic, political, social, cultural and technological systems that operate in a country or in international trade.

Goods and services outcome of human efforts to meet the wants and needs of people

Goods are items that are tangible, such as pens, salt, apples, and hats. Services are activities provided by other people, who include doctors, lawn care workers, dentists, barbers, waiters, or online servers. Taken together, it is the production, distribution, and consumption of goods and services which underpins all economic activity and trade. According to economic theory, consumption of goods and services is assumed to provide utility (satisfaction) to the consumer or end-user, although businesses also consume goods and services in the course of producing other goods and services.

A system is a group of interacting or interrelated entities that form a unified whole. A system is delineated by its spatial and temporal boundaries, surrounded and influenced by its environment, described by its structure and purpose and expressed in its functioning.

International trade exchange of capital, goods, and services across international borders or territories

International trade is the exchange of capital, goods, and services across international borders or territories.

Contents

Etymology

The English-language word commerce has been derived from the Latin word commercium, from cum ("together") and merx ("merchandise"). [2]

Latin Indo-European language of the Italic family

Latin is a classical language belonging to the Italic branch of the Indo-European languages. The Latin alphabet is derived from the Etruscan and Greek alphabets and ultimately from the Phoenician alphabet.

History

The caduceus - used today as the symbol of commerce, and traditionally associated with the Roman god Mercury, patron of commerce, trickery and thieves. Caduceus.svg
The caduceus - used today as the symbol of commerce, and traditionally associated with the Roman god Mercury, patron of commerce, trickery and thieves.

Some commentators[ which? ] trace the origins of commerce to the very start of transactions in prehistoric times. Apart from traditional self-sufficiency, trading became a principal facility of prehistoric people, who bartered what they had for goods and services from each other (the barter system was popular in ancient times where one could get goods and services by offering the other person some other good and service according to their need instead of paying with monetary systems, which developed later). Historian Peter Watson and Ramesh Manickam date the history of long-distance commerce from circa 150,000 years ago. [4]

Financial transaction agreement, or communication, carried out between a buyer and a seller to exchange an asset for payment

A financial transaction is an agreement, or communication, carried out between a buyer and a seller to exchange an asset for payment.

Trade Exchange of goods and services.

Trade involves the transfer of goods or services from one person or entity to another, often in exchange for money. A system or network that allows trade is called a market.

Barter exchange of goods

In trade, barter is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists distinguish barter from gift economies in many ways; barter, for example, features immediate reciprocal exchange, not delayed in time. Barter usually takes place on a bilateral basis, but may be multilateral. In most developed countries, barter usually only exists parallel to monetary systems to a very limited extent. Market actors use barter as a replacement for money as the method of exchange in times of monetary crisis, such as when currency becomes unstable or simply unavailable for conducting commerce.

In historic times, the introduction of currency as a standardized money facilitated the wider exchange of goods and services. Numismatists have collections of tokens, which include coins from some Ancient-World large-scale societies, although initial usage involved unmarked lumps of precious metal. [5]

A currency, in the most specific use of the word, refers to money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money in common use, especially for people in a nation. Under this definition, US dollars (US$), pounds sterling (£), Australian dollars (A$), European euros (€), Russian rubles (₽) and Indian Rupees (₹) are examples of currency. These various currencies are recognized as stores of value and are traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are defined by governments, and each type has limited boundaries of acceptance.

Money Object or record accepted as payment

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfils these functions can be considered as money.

A numismatist is a specialist in numismatics. Numismatists include collectors, specialist dealers and scholars who use coins in object-based research. Although the term numismatics was first coined in English in 1829, people had been collecting and studying coins long before this, all over the world.

The circulation of a standardized currency provides a method of overcoming the major disadvantage to commerce through use of a barter system, the "double coincidence of wants" (which means if someone wants something from a person, that person should also be in need of a thing or a service which they can provide), necessary for barter trades to occur. For example, if a person who makes pots for a living needs a new house, he/she may wish to hire someone to build it for him/her. But he/she cannot make an equivalent number of pots to equal this service done for him/her, because even if the builder could build the house, the builder might not want many or any pots. Also, the barter system had a major drawback in that whatever goods a person get as payment may not necessarily store for long amounts of time. For example: if a person has got dozens of fruits as his payment, he/she can't store fruit for long or they may rot - which means a person will have to bear a huge loss. Currency solved this problem by allowing a society as a whole to assign values [ citation needed ] and thus to collect goods and services effectively and to store them for later use, or to split them among minions.

Economic value is a measure of the benefit provided by a good or service to an economic agent. It is generally measured relative to units of currency, and the interpretation is therefore "what is the maximum amount of money a specific actor is willing and able to pay for the good or service"?

During the Middle Ages, commerce developed in Europe through the trading of luxury goods at trade fairs. Some wealth became converted into movable wealth or capital.[ citation needed ] Banking systems developed where money on account was transferred[ by whom? ] across national boundaries. [6] Hand-to-hand markets became a feature of town life, and were regulated by town authorities. [7]

Middle Ages Period of European history from the 5th through the 15th centuries

In the history of Europe, the Middle Ages lasted from the 5th to the 15th century. It began with the fall of the Western Roman Empire and merged into the Renaissance and the Age of Discovery. The Middle Ages is the middle period of the three traditional divisions of Western history: classical antiquity, the medieval period, and the modern period. The medieval period is itself subdivided into the Early, High, and Late Middle Ages.

Fair gathering of people for a variety of entertainment or commercial activities

A fair, also known as a funfair, is a gathering of people for a variety of entertainment or commercial activities. It is normally of the essence of a fair that it is temporary with scheduled times lasting from an afternoon to several weeks.

Wealth abundance of value

Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating old English word weal, which is from an Indo-European word stem. A community, region or country that possesses an abundance of such possessions or resources to the benefit of the common good is known as wealthy.

Today commerce includes as a subset of itself a complex system of companies which try to maximize their profits by offering products and services to the market (which consists both of individuals and groups and other companies or institutions) at the lowest production cost. A system of international trade has helped to develop the world economy; but, in combination with bilateral or multilateral agreements to lower tariffs or to achieve free trade, has sometimes harmed third-world markets for local products (see Globalization.)

See also

Related Research Articles

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

Merchant businessperson who trades in commodities that were produced by others

A merchant is a person who trades in commodities produced by other people. Historically, a merchant is anyone who is involved in business or trade. Merchants have been known for as long as industry, commerce, and trade have existed. During the 16th-century, in Europe, two different terms for merchants emerged: One term, meereniers, described local traders such as bakers, grocers, etc.; while a new term, koopman, described merchants who operated on a global stage, importing and exporting goods over vast distances, and offering added value services such as credit and finance.

Commodity money Money with value derived from composition from a commodity (such as silver or gold coins)

Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects that have value in themselves as well as value in their use as money.

Retail is the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit. Retailers satisfy demand identified through a supply chain. The term "retailer" is typically applied where a service provider fills the small orders of a large number of individuals, who are end-users, rather than large orders of a small number of wholesale, corporate or government clientele. Shopping generally refers to the act of buying products. Sometimes this is done to obtain final goods, including necessities such as food and clothing; sometimes it takes place as a recreational activity. Recreational shopping often involves window shopping and browsing: it does not always result in a purchase.

A store of value is the function of an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. More generally, a store of value is anything that retains purchasing power into the future.

Medium of exchange is one of the three fundamental functions of money in mainstream economics. It is a widely accepted token which can be exchanged for goods and services. Because it can be exchanged for any good or service it acts as an intermediary instrument and avoids the limitations of barter; where what one wants has to be exactly matched with what the other has to offer.

Roman commerce

The commerce of the Roman Empire was a major sector of the Roman economy during the early Republic and throughout most of the imperial period. Fashions and trends in historiography and in popular culture have tended to neglect the economic basis of the empire in favor of the lingua franca of Latin and the exploits of the Roman legions. The language and the legions were supported by trade while being at the same time part of its backbone. Romans were businessmen and the longevity of their empire was due to their commercial trade.

Anarchist economics is the set of theories and practices of economic activity within the political philosophy of anarchism. With the exception of anarcho-capitalists who accept private ownership of the means of production, anarchists are anti-capitalists. They argue that its characteristic institutions promote and reproduce various forms of economic activity which they consider oppressive, including private property, hierarchical production relations, collecting rents from private property, taking a profit in exchanges and collecting interest on loans. They generally endorse possession-based ownership rather than propertarianism.

The history of money concerns the development of social systems that provide at least one of the functions of money. Such systems can be understood as means of trading wealth indirectly; not directly as with barter. Money is a mechanism that facilitates this process.

Market (economics) mechanisms whereby supply and demand confront each other and deals are made, involving places, processes and institutions in which exchanges occurs (for physical venues, use Q132510 or Q330284)

A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and resource allocation in a society. Markets allow any trade-able item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale.

An economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents. Understood in its broadest sense, 'The economy is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources'. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. However, monetary transactions only account for a small part of the economic domain.

Archaic globalization

Archaic globalization is a phase in the history of globalization, and conventionally refers to globalizing events and developments from the time of the earliest civilizations until roughly 1600. Archaic globalization describes the relationships between communities and states and how they were created by the geographical spread of ideas and social norms at both local and regional levels.

Labour vouchers are a device proposed to govern demand for goods in some models of socialism unlike money does under capitalism.

Economy of the Ming dynasty Economy of China in from the 14th through 17th centuries

The economy of the Ming dynasty (1368–1644) of China was the largest in the world during that period. It is regarded as one of China's three golden ages. The period was marked by the increasing political influence of the merchants, the gradual weakening of imperial rule, and technological advances.

The Barter Network

The Barter Network is a commercial trading network of companies in the United States founded in 2006 by Bergenske Enterprises, Inc. of which G. Jason Bergenske, President and CEO owns 100% of the corporation's shares. The Barter Network has grown to over 700 companies. These companies trade among each other using a medium of exchange called a trade dollar.

This glossary of economics is a list of definitions of terms and concepts used in economics, its sub-disciplines, and related fields.

References

  1. "commerce". English: Oxford Living Dictionaries. Oxford University Press. n.d. Retrieved December 11, 2018. 1 The activity of buying and selling, especially on a large scale.
  2. Wikisource-logo.svg Chisholm, Hugh, ed. (1911). "Commerce"  . Encyclopædia Britannica . 6 (11th ed.). Cambridge University Press. p. 766.
  3. Hans Biedermann, James Hulbert (trans.), Dictionary of Symbolism - Cultural Icons and the Meanings behind Them, p. 54.
  4. Watson, Peter (2005). Ideas : A History of Thought and Invention from Fire to Freud. HarperCollins. ISBN   0-06-621064-X. Introduction......./
  5. Gold served especially commonly as a form of early money, as described in "Origins of Money and of Banking" - Davies, Glyn (2002). Ideas: A history of money from ancient times to the present day. University of Wales Press. ISBN   0-7083-1717-0.
  6. Martha C. Howell (12 April 2010). Commerce Before Capitalism in Europe, 1300-1600. Cambridge University Press. ISBN   978-0-521-76046-1.
  7. Fernand Braudel (1982). Civilization and Capitalism, 15th-18th Century: The wheels of commerce. University of California Press. p. 30. ISBN   978-0-520-08115-4.