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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
(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
(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.

Evolution of
The historical development of business and its processes of development up to now is called
evolution of business. Business was not evolved in one or two days. It can be studied in two

Evolution of industry
It is dated with the evolution of human beings. It is as old as human civilization. It was developed
through various stages.

A. Hunting stage
In ancient times people lived in caves and fulfilled their basic needs of food an clothes through
hunting the wild animals in forest. They were not civilized and hovered here and there. Their
needs were also limited.

B. Pastoral stage
The stage of further development of human from barbarism is called pastoral stage. This stage is
basically called the age of keeping animals. Animals were used for milk, meat, wool, skin and so
on beyond food and clothes. The wants went on increasing and development also started.

C. Agriculture stage
Slowly, human beings became a little bit civilized and got idea about farming and keeping cattle.
This stage was the major stage of development of industry. In this stage people started to do
agriculture and live in river banks. They started to cultivate crops and domesticate the animals.
Development of agriculture is divided into 5 stages they are
I. Handicraft stage:
It is the beginning of industrial era. It is the stage of development of industry. Simple hands
made tools were also developed. Local resources were the major source of raw materials. In the

beginning of this stage people were only limited to their own needs but later own surplus
products were used to exchange the goods with the roods basically called barter system.
Products were exchanged with product and market was starting to develop. Capital invested was

Ii. Guild stage:

It was the beginning of organized activities. Organized groups of traders, craftsmen, artisans
used to collect various resources from the local areas and produced goods using them.

Iii. Age of domestic system

After the stage of guild the age of domestic system was initiated. Crafts men were not able to
fulfill the unlimited and increasing wants of people by using the limited resource. So, use of
hands and tools for producing quality goods was introduced. People were employed and were
paid according to the units of goods produced. However salary was very low because the value
of money was much higher at that time.

Iv. Industrial revolution:

It began with the replacement of old system. It is the turning point of modern industrialization.
Domestic system of production was replaced by large scale factory system. There was invention,
innovation .development of scientific techniques which encouraged mass production and
distribution. There were numerous job opportunities. Salary was increased and quality was

V. Present age:
Todays modern era with industrialization, use of technology, computerization, modernization
robotizing is the most developed stage of industries. Goods are being produced meeting the
demand of large number of people. There are huge number of industries producing large
number of goods to meet large amount of needs and wants by providing many jobs and salaries.

Evolution of commerce:
It is related with the distribution and exchange of goods and services. It is related with
transportation, communication, Banking, warehousing import export, trade and so on. It links
between producer and consumer. It gradually develops along with the development of human
and society. There are many stages of evolution of commerce

A. Self sufficiency stage

It is the initial stage of commercial evolution. The wants are very limited. In this stage people
produced goods themselves to satisfy their own basic needs. They survived through hunting and
gathering foods. There was no market. There was thus no exchange of goods. They were

B. Barter system:
The wants of people increased with development of society. There was both advancement and
civilization of market. Self sufficiency stage didnt remain with advancement. They started to
exchange the goods they produced with goods that other people produced to fulfill other
requirements. This is called barter system. There was exchange of goods and services with
goods and services.

C. Origin of money:
From the beginning of barter, people felt that there was difficulty in deferred payment,
commerce, divisibility and place of exchange .Thats why money was originated. People
developed coins but there was difficulty in large payment. So paper money was introduced.
Money was used as medium of exchange, Measurement of value, deferred payment,
redistribution of income and wealth, credit system and many more. After the origin of money,
national and international trade started.

D. National economy:
In this stage, buying and selling of goods and services was done within the country. The local
market converted into regional and city market. There was division of work and specialization.
Then goods were produce not only for local people but also for national market. There was also
development in banking, advertising, insurance, warehouse and other auxiliaries,.

E. International economy:
International economy s called global economy. The globalization of trade introduced to speed
up the activities of trade in the international level. It is not possible for a country to produce all
demanded goods according to needs and wants. Therefore the countries started to import the
goods and other countries exported. Slowly, import and export was introduced in all counties.
Trade started to extend in world market. WTO (world trade organization) was also established to
control the level of import, export and evils associated with them.