The Double Coincidence of Wants

Bartering was at one stage in Mankind's history the only the method by which producers and consumers could exchange goods and services.

However, it was terribly inefficient. Goods are often extremely difficult to swap logistically for starters. I mean, can you imagine carrying a bag of potatoes to your local shop, just to exchange for a book, simply because their perceived values are equal?

Moreover more challenging is to find two items that are judged by two different people to have equal, or less justly, similar, values.

This is where the title, 'The Double Coincidence of Wants' comes in. With a barter system, there may be many people offering goods and services, and many people wanting them, but the problem lies in the issue of them possessing things wanted by the people they desire to trade with. Hence, the double coincidence. You must not only find someone with something you want, but you must find somebody with something you want, who wants something you have and possess. Unlikely, right?

That's why bartering is extremely inefficient and unproductive. And that's why today we have money. Be it US Dollars, UK Sterling, Euros or Yen, money allows local, national and global trade, via electronic payments and physical payments. With a system of bartering, we would still be stuck were we were as a species thousands of years ago.