From Barter to Money
1. How does the barter system take place and what kinds of commodities were used for exchange under the system?
Answer:
The barter system is a way of exchanging goods and services without using money. People trade something they have for something they need. For example, if you have an extra eraser and need a pencil, you can exchange your eraser with someone who has an extra pencil. Commodities used in the barter system included cowrie shells, salt, tea, tobacco, cloth, cattle (like cows, goats, horses, sheep), seeds, and even giant stone discs called Rai stones in some places.
2. What were the limitations of the barter system?
Answer:
The barter system had several problems:
- Double coincidence of wants: Both people needed to want what the other offered. For example, if you have wheat but need shoes, you must find someone who wants wheat and has shoes to trade.
- Lack of common measure of value: It was hard to decide how much one item was worth compared to another. For example, how many bags of wheat equal one pair of shoes?
- Divisibility: Some items, like an ox, cannot be divided into smaller parts for smaller trades.
- Portability: Carrying heavy or bulky items, like an ox or bags of wheat, was difficult.
- Durability: Some items, like wheat, could rot or get damaged, so they couldn’t be stored for long.
3. What were the salient features of ancient Indian coins?
Answer:
Ancient Indian coins had these features:
They were made from precious metals like gold, silver, copper, or their alloys, making them strong and valuable.
They were called kārṣhāpaṇas or paṇas and had symbols called rūpas punched on them.
The coins had two sides: the obverse (head) and reverse (tail), with designs like animals, trees, hills, kings, queens, or deities. For example, Chalukya coins had a Varaha (Vishnu’s avatar) on one side and a three-tiered parasol on the other.
Coins were issued by rulers and used for trade, sometimes even across different kingdoms.
4. How has money as a medium of exchange transformed over time?
Answer:
Money has changed a lot over time:
- Barter System (6000 BCE): People exchanged goods like cowrie shells, cattle, or seeds.
- Coins (1000 BCE–600 BCE): Metal coins made of gold, silver, or copper were used, making trade easier.
- Paper Money (1861): Paper notes were introduced in India, which were lighter and easier to carry than coins.
- Digital Money (1980–2016): Today, we use debit cards, credit cards, net banking, and UPI (Unified Payments Interface) for payments. People also use QR codes to transfer money digitally from bank accounts.
5. What steps might have been taken in ancient times so that Indian coins could become the medium of exchange across countries?
Answer:
In ancient times, Indian coins became a medium of exchange across countries due to these steps:
- Use of precious metals: Coins were made from valuable metals like gold and silver, which were accepted everywhere.
- Powerful rulers: Coins from strong kingdoms were trusted and used in trade with other regions.
- Maritime trade: Indian coins were found in places like Kerala and Tamil Nadu, showing active trade with other countries, such as the Roman Empire.
- Standard designs: Symbols and motifs on coins made them recognizable and acceptable in different regions.
6. Read the following lines from the Arthaśhāstra:
“An annual salary of 60 paṇas could be substituted by an āḍhaka of grain per day, enough for four meals…” (One āḍhaka is equal to about 3 kg). What does this indicate about the value of one paṇa?
The fine for failing to help a neighbour was 100 paṇas. Compare this with the annual salary. What conclusion can you draw about the human values being encouraged through this?
Answer:
- Value of one paṇa: According to the Arthaśhāstra, an annual salary of 60 paṇas could be replaced by an āḍhaka (3 kg) of grain per day, enough for four meals. This means 60 paṇas was enough to buy food for a year (about 365 days). So, one paṇa was worth roughly 6 kg of grain (365 days × 3 kg ÷ 60 paṇas), which shows that one paṇa had significant value, enough to buy food for a few days.
- Fine vs. Salary: The fine for not helping a neighbour was 100 paṇas, which is much higher than the annual salary of 60 paṇas. This shows that helping neighbours was very important. The high fine encouraged people to care for and support their community, promoting values like kindness, cooperation, and responsibility.
7. Write and enact a skit to show how people may have persuaded each other to use cowrie shells (or other such items) as the medium of exchange.
Answer:
Skit: Convincing to Use Cowrie Shells
Characters: Maya (a farmer), Anil (a potter), Ria (a cloth weaver), and Village Elder.
Setting: A village market where people are bartering goods.
Scene:
(Maya is trying to trade her wheat for Anil’s pots, but Anil doesn’t want wheat.)
- Maya: Anil, I need a pot for cooking. I have plenty of wheat to trade!
- Anil: Sorry, Maya, I already have enough wheat. I need cloth for my family.
- Ria: I have cloth, but I don’t need wheat or pots. I want fish!
- Maya: This is so hard! We all want different things.
- Village Elder: (enters) Friends, I have an idea! Why don’t we use cowrie shells as a medium of exchange?
- Anil: Cowrie shells? Why would I want those?
- Elder: They’re small, easy to carry, and don’t spoil like wheat or fish. Everyone can accept them and use them to trade for what they need.
- Ria: Hmm, so I give my cloth for cowrie shells and use them to buy fish later?
- Elder: Exactly! Maya, you give shells for Anil’s pot. Anil, you use those shells to buy cloth from Ria. It’s simple!
- Maya: That sounds fair. Let’s try it! (hands over shells to Anil) Here are 10 cowrie shells for your pot.
- Anil: Great! (gives pot to Maya) I’ll use these shells to get cloth from Ria.
- Ria: I like this idea. I’ll accept shells for my cloth from now on!
- All: Thank you, Elder! Cowrie shells make trading so much easier!
- Moral: Cowrie shells were accepted because they solved the problems of bartering, like double coincidence of wants and portability.
- (Students can enact this skit in class, with props like fake shells, pots, and cloth.)
8. The RBI is the only legal source that prints and distributes paper currency in India. To prevent illegal printing of notes and their misuse, the RBI has introduced many security features. Find out what some of these measures are and discuss them in class.
Answer:
The Reserve Bank of India (RBI) includes special security features in paper currency to prevent illegal printing and misuse. Some of these features are:
- Watermark: A faint image of Mahatma Gandhi or the RBI logo appears when you hold the note against light.
- Security Thread: A thin strip runs through the note, with “RBI” and “Bharat” written on it. It glows under ultraviolet light.
- Micro-text: Tiny letters, like “RBI” or the note’s value, are printed in small sizes, visible only with a magnifying glass.
- Raised Printing: Some parts, like the RBI emblem, feel rough when touched, helping visually impaired people identify notes.
- Colour-Shifting Ink: The number on the note (like ₹100) changes color when tilted, making it hard to copy.
- Discussion in class: Students can bring currency notes, observe these features, and discuss why they are important to stop fake money and help people trust the currency.
9. Interview a few of your family members and local shopkeepers, and ask them their preferences in making and receiving payments—do they prefer cash or UPI? Why?
Answer:
(Since this requires real interviews, here’s a sample response based on common preferences. Students should conduct actual interviews and write their findings.)
I interviewed my mother, uncle, and a nearby shopkeeper about their payment preferences:
- Mother: She prefers UPI because it’s fast and convenient. She uses her phone to pay bills or buy groceries without carrying cash. She says it’s safe as she gets instant payment confirmation.
- Uncle: He likes cash for small payments, like buying vegetables or paying for auto rides, because some vendors don’t accept UPI. But he uses UPI for bigger payments, like online shopping.
- Shopkeeper (Mr. Sharma): He prefers UPI because most customers pay through QR codes, and the money goes directly to his bank account. However, he keeps some cash for change or when customers don’t have UPI.
The Big Questions (Page 229)
1. How did exchange take place before money?
Answer:
Before money, people used the barter system to exchange goods and services. In this system, people traded things they had for things they needed. For example, if you had an extra eraser and needed a pencil, you could trade your eraser with someone who had a pencil. They used items like cowrie shells, salt, tea, tobacco, cloth, cattle (cows, goats, horses, sheep), seeds, and even large stone discs (like Rai stones) for trading. This way, people got what they needed without using money.
2. Why did money come into existence?
Answer:
Money came into existence because the barter system had many problems:
- Double coincidence of wants: Both people had to want what the other offered, which was hard to find.
- No common value: It was difficult to decide how much one item was worth compared to another.
- Divisibility: Items like an ox couldn’t be divided for smaller trades.
- Portability: Carrying heavy items like wheat or cattle was tough.
- Durability: Things like wheat could rot or get damaged. Money solved these issues by acting as a common medium of exchange that everyone accepted, making trade easier, fairer, and more convenient.
3. How has money transformed into various forms over time?
Answer:
Money has changed over time into different forms:
- Barter System (6000 BCE): People traded goods like cowrie shells, cattle, or seeds.
- Coins (1000 BCE–600 BCE): Metal coins made of gold, silver, or copper were used. They were strong, portable, and had symbols like animals or kings.
- Paper Money (1861): Paper notes were introduced in India. They were lighter and easier to carry than coins, used for higher values.
- Digital Money (1980–2016): Today, money is electronic, like debit cards, credit cards, net banking, and UPI. People use QR codes to pay with phones, transferring money directly between bank accounts.
This evolution made payments faster, safer, and more convenient.
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