In the modern economy there has been a considerable change in the system of exchange. In the field of production, the system of exchange is also connected with efficiency and skill.
The system of exchange is found in all societies in some form or other. If we will divide the society into primitive and modern, then we will find that in primitive society exchange was chiefly based on barter system. But the modern economy is based on the system of exchange. The most important among them is the economy of currency. The role of the currency is to act as a medium of exchange, standard of value and means of payment.
Primitive economic order was dependant upon weather conditions like rain, sun flood etc. The division of labor was based on age and sex. The concept of personal property was at initial stage. The primitive society was self-sufficient in fulfilling its economic needs.
Therefore the system of commerce did not develop in these societies. From whatever was left from the hunting and collection of food, developed the customs like gift or present, hospitality, free lending, free borrowing and common use. In these communities individual prestige or familial prestige was considered more valuable than property.
Agrarian economy developed in the place of primitive communism, as the knowledge of using land and growing slants developed. This society was marked by collective, familial or personal ownership of land. Production exceeded consumption. This surplus production made possible the exchange of commodities between two groups. Regular markets developed.
Development of rural markets as the centers of local trade have been made. The owners of land and property received money and services from village communities and peasants. In return they protected villagers and peasants from invaders and murderers.
Jajmani system was prevalent instead of currency with the development of agriculture services of different castes were required. As in Indian society different castes are specialized in different occupations, therefore interdependence is necessary. Under this system each caste within the village is expected to give certain standardized services to other castes. For example a brahmin, a kumbhar, a dhobi, a carpenter has a special function.
A family definitely have to depend upon these families. Similarly these families also provide services as required. Therefore the family or families entitled to certain services from certain persons are called Jajman and the persons rendening these services are called Kameen of Jajman. The Kameens are paid something for their services. In majority of cases they are paid grains for the services.
The economy based on industrialization is very complex. Instead of being influenced and controlled by the environment man tries to control it. The industrial economy is based on differentiation, complex division of labor, huge production and colossal machinery.
The technology has changed the relationship between man and his environment. The industrial economic system gave importance of capital instead of labor. Factory was considered as units, than family. Huge machines were used in the place of human and animal. Power production was based on for exchange and profit and not just for livelihood.
The economy was based on currency. World markets developed instead of local markets. Competition developed instead of co-operation. A very complicated system of the division of labor developed. The modern economy is mainly based on the system of exchange. The mutual value of various currencies is determined at the international level. At the same time in the international market prices of various commodities are determined through currency and the exchange of commodities have taken place among various countries. A system of exchange common to both the primitive and modern societies is the system gifts. The spirit of reciprocity and mutual obligation works behind the exchange of gifts.