# Trade By [Untitled](https://paragraph.com/@0x7d3f960f5f186ce895845ef4a98b4b3a941ac1d8) · 2023-04-14 --- **Trade** involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a [system](https://en.wikipedia.org/wiki/System) or network that allows trade as a [market](https://en.wikipedia.org/wiki/Market_\(economics\)). An early form of trade, [barter](https://en.wikipedia.org/wiki/Barter), saw the direct exchange of goods and services for other goods and services,[\[1\]](https://en.wikipedia.org/wiki/Trade#cite_note-Samuelson1939-1) i.e. trading things without the use of money.[\[1\]](https://en.wikipedia.org/wiki/Trade#cite_note-Samuelson1939-1) Modern traders generally negotiate through a medium of exchange, such as money. As a result, **buying** can be separated from **selling**, or [earning](https://en.wikipedia.org/wiki/Earnings). The [invention of money](https://en.wikipedia.org/wiki/History_of_money#Emergence_of_money) (and letter of [credit](https://en.wikipedia.org/wiki/Credit_\(finance\)), [paper money](https://en.wikipedia.org/wiki/Paper_money), and [non-physical money](https://en.wikipedia.org/wiki/Digital_currency)) greatly simplified and promoted trade. Trade between two traders is called [bilateral trade](https://en.wikipedia.org/wiki/Bilateral_trade), while trade involving more than two traders is called [multilateral trade](https://en.wikipedia.org/wiki/Multilateral_trade). In one modern view, trade exists due to specialization and the [division of labour](https://en.wikipedia.org/wiki/Division_of_labour), a predominant form of [economic activity](https://en.wikipedia.org/wiki/Economic_activity) in which individuals and groups concentrate on a small aspect of production, but use their output in trades for other products and needs.[\[2\]](https://en.wikipedia.org/wiki/Trade#cite_note-DollarKraay2004-2) Trade exists between regions because different regions may have a [comparative advantage](https://en.wikipedia.org/wiki/Comparative_advantage) (perceived or real) in the production of some trade-able [commodity](https://en.wikipedia.org/wiki/Commodity)—including production of natural resources scarce or limited elsewhere. For example: different regions' sizes may encourage [mass production](https://en.wikipedia.org/wiki/Mass_production). In such circumstances, trade at [market prices](https://en.wikipedia.org/wiki/Market_price) between locations can benefit both locations. Different types of traders may specialize in trading different kinds of goods; for example, the [spice trade](https://en.wikipedia.org/wiki/Spice_trade) and [grain trade](https://en.wikipedia.org/wiki/Grain_trade) have both historically been important in the development of a global, international economy. [Retail](https://en.wikipedia.org/wiki/Retail) trade consists of the [sale](https://en.wikipedia.org/wiki/Sales) of goods or [merchandise](https://en.wikipedia.org/wiki/Merchandise) from a very fixed location[\[3\]](https://en.wikipedia.org/wiki/Trade#cite_note-3) (such as a [department store](https://en.wikipedia.org/wiki/Department_store), [boutique](https://en.wikipedia.org/wiki/Boutique) or [kiosk](https://en.wikipedia.org/wiki/Kiosk)), [online](https://en.wikipedia.org/wiki/Online) or by [mail](https://en.wikipedia.org/wiki/Mail), in small or individual lots for direct [consumption](https://en.wikipedia.org/wiki/Consumption_\(economics\)) or use by the purchaser.[\[4\]](https://en.wikipedia.org/wiki/Trade#cite_note-fas-4) [Wholesale](https://en.wikipedia.org/wiki/Wholesale) trade is traffic in goods that are sold as merchandise to [retailers](https://en.wikipedia.org/wiki/Retailer), or to industrial, commercial, institutional, or other professional [business](https://en.wikipedia.org/wiki/Business) users, or to other wholesalers and related subordinated services. Historically, openness to [free trade](https://en.wikipedia.org/wiki/Free_trade) substantially increased in some areas from 1815 to the outbreak of World War I in 1914. Trade openness increased again during the 1920s but collapsed (in particular in Europe and North America) during the [Great Depression](https://en.wikipedia.org/wiki/Great_Depression) of the 1930s. Trade openness increased substantially again from the 1950s onwards (albeit with a slowdown during the [oil crisis of the 1970s](https://en.wikipedia.org/wiki/1973_oil_crisis)). Economists and [economic historians](https://en.wikipedia.org/wiki/Economic_historians) contend that current levels of trade openness are the highest they have ever been.[\[5\]](https://en.wikipedia.org/wiki/Trade#cite_note-5)[\[6\]](https://en.wikipedia.org/wiki/Trade#cite_note-6)[\[7\]](https://en.wikipedia.org/wiki/Trade#cite_note-7) Prehistory Trade originated from [human communication](https://en.wikipedia.org/wiki/History_of_communication) in [prehistoric](https://en.wikipedia.org/wiki/Prehistoric) times. Trading was the main facility of prehistoric people,\[[_citation needed_](https://en.wikipedia.org/wiki/Wikipedia:Citation_needed)\] who exchanged goods and services from each other in a gift economy before the innovation of modern-day currency. [Peter Watson](https://en.wikipedia.org/wiki/Peter_Watson_\(business_writer\)) dates the [history of long-distance commerce](https://en.wikipedia.org/wiki/History_of_international_trade) from c. 150,000 years ago.[\[9\]](https://en.wikipedia.org/wiki/Trade#cite_note-Watson2005_150-9) In the Mediterranean region, the earliest contact between cultures involved members of the species _Homo sapiens_, principally using the Danube river, at a time beginning 35,000–30,000 [BP](https://en.wikipedia.org/wiki/Before_Present).[\[10\]](https://en.wikipedia.org/wiki/Trade#cite_note-Abulafia,_Rackham,_Suano-10)[\[11\]](https://en.wikipedia.org/wiki/Trade#cite_note-11)[\[12\]](https://en.wikipedia.org/wiki/Trade#cite_note-12)[\[13\]](https://en.wikipedia.org/wiki/Trade#cite_note-13)\[[_need quotation to verify_](https://en.wikipedia.org/wiki/Wikipedia:Verifiability)\] Some\[[_who?_](https://en.wikipedia.org/wiki/Wikipedia:Manual_of_Style/Words_to_watch#Unsupported_attributions)\] trace the origins of commerce to the very start of [transactions](https://en.wikipedia.org/wiki/Financial_transaction) in [prehistoric](https://en.wikipedia.org/wiki/Prehistoric) times. Apart from traditional [self-sufficiency](https://en.wikipedia.org/wiki/Self-sufficiency), trading became a principal [facility](https://en.wikipedia.org/wiki/Faculty_\(disambiguation\)) of prehistoric people, who [bartered](https://en.wikipedia.org/wiki/Barter) what they had for goods and services from each other. --- *Originally published on [Untitled](https://paragraph.com/@0x7d3f960f5f186ce895845ef4a98b4b3a941ac1d8/trade)*