Why Double Coincidence of Wants is Necessary in a Barter System?


A shoe manufacturer wants to sell shoes in the market and buy wheat.

The shoe manufacturer will first exchange shoes that he had produced for money, and then exchange the money for wheat.

Imagine how much more difficult it would be if the shoe manufacturer had to directly exchange shoes for wheat without the use of money.


He would have to look for a wheat growing farmer, who not only wants to sell wheat but also wants to buy the shoes in exchange.

That is, both parties have to agree to sell and buy each others commodities. This is known as double coincidence of wants.

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