The evolution of commerce and commercial activities can be studied under the following stages.

a. Family Economy Stage. b. Hunting and Fishing Stage

c. Pastoral Stage

d. Agricultural Stage


e. Barter Economy Stage

f. Money Economy Stage

g. Town Economy Stage

h. International Trade Stage


a. Family Economy Stage:

This was the stage of self-sufficiency. At this stage the members of a family used to divide work among them and tried to live as an independent unit. The procurement of food was meant for the consumption of entire family.

b. Hunting and Fishing Stage:

This was the stage where men spent their time in hunting and fishing for food while the women kept themselves busy in gathering fruits and distributing the food among all the family members. The food procured was only to the extent required for the family members.


c. Pastoral Stage:

At this stage the members of the family started domesticating animals for the food requirements of the family for a prolonged period. Men used to move from place to place in search of food and shelter. They used to cloth themselves with grass, leaves and animal skins.

d. Agricultural Stage:

Man developed the art of cultivation of land and started living in a fixed place. Men built houses and started cultivating land. This marked the beginning of the growth of collective living which led to the emergence of communities and villages.


The true form of commercial activities started from this stage where people started producing more than their families required and the surplus produce was exchanged which led to the Barter System. The foundation for modern commerce was laid down during this stage.

e. Barter Economy Stage:

Barter System involves exchange of goods and services for other goods and services. This marked the beginning of the true form of business activities. The barter economy laid foundation for increase in the other commercial activities like trading, division of labour, employment of slaves to get the work done etc.

The barter economy however, had its own drawbacks which led to the discontinuance of the exchange system. The drawbacks were: Absence of double co-incidence of wants: It became difficult for any one person with surplus produce to come across another person who could exchange the produce for the suitable requirement of both of them.


(i) E.g. a Barber’s service may not be required by farmer growing rice, while the Barber may need rice for his sustenance, for which he could not offer any other suitable product to the farmer in return.

(ii) Lack of common measure of value:

It was not possible to fix common values of measures for products or service to be exchanged in an equitable manner which was fair enough to both the parties concerned.

(iii)Lack of storage facilities:


The surplus production had to be stored in order to act as a source of exchange in future. This was not possible without loss in the value of the products stored, due to lack of proper storage facilities.

(Iv) Lack of sub-division:

Certain items could not be sub-divided to the required quantity to be exchanged with various other products to satisfy the variety of wants of individuals. E.g. A cow or a buffalo could not be divided by the milkman for rice, wheat and sugar required by him.

Money Economy Stage:

The drawbacks of the Barter Economy led to the emergence of the introduction of money as a common medium of exchange and settlement of transactions. At first, animal skins, furs, shells etc. were used as money and later metal was used as a medium of exchange. Still later various metals were converted into coins of definite size and weight.

Town Economy Stage:

The development of a common medium of exchange led to the increase in the trading activities. Specialized activities were carried on by groups of individuals on a locality basis. This led to the growth of towns and cities. Trade began between traders of different towns and cities.

International Trade Stage:

The traders could not only trade within the boundaries of their countries but also beyond. With the discovery of the Cape of Good Hope route by Vasco da Gama, discovery of America, and circum navigation by Magellan goods were now produced to be sold in foreign markets. Specialised institutions like banks, transport organisations, insurance agencies, and warehouses helped in the development of international as well as domestic trade.