Commodity
Topic: Money: From Barter to Digital Currency · NCERT: Class 7, Ch 11 "From Barter to Money"
Meaning
A commodity is any good that can be traded, bought and sold. Before money existed, people used commodities themselves to make payments. Salt, cloth or cattle could each be swapped for other goods. Commodities matter because the story of money begins with them. Over time, a few commodities that everyone valued came to be used as the common means of payment.
Example
Across the world, cowrie shells, salt, tea, tobacco, cloth, seeds and cattle (cows, goats, horses, sheep) have all been used for exchange. On Yap Island in Micronesia, people even used giant discs of rock called Rai stones.
Don't confuse with
- Commodity money: a commodity is simply any tradable good. Commodity money is a commodity that has been accepted as the common means of payment, such as grains, cattle or gold coins.