Difficulty in deferred payment in barter system. Explicate.

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readerofbooks | College Teacher | (Level 2) Educator Emeritus

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This is a very interesting question. When there is deferred payment or even a late payment, typically what happens is that a person who owes the payment pays a little more. They will probably pay only a percentage more or so for the ability to delay payment for some period of time. However, when we are dealing with a barter system, it is hard to pay only a percentage.

In the least there will have to be a three step process. First, you will have to agree upon the cost of things and then seek to pay only a portion of it. And if the thing being bartered cannot be divided (to pay only a portion of it), then you will have to think of something else that is equal to the amount you owe and the person who is owed the money has to agree.

As you can see, without the use of currency, which all agree on, it is very difficult to transact business. It can be done, but it is difficult.

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