How Modern Economies Differ From Those Of The Past?

What does your breakfast bagel, your holiday package for two, and the largest merger of two companies seen in decades, have in common? The answer will always remain the same: the economy.

Each and every activity that is performed on a daily basis, whether you are an individual living alone or a large media conglomerate, contributes to the growth; or decline; of the economy. From opening a tap to wash a frying pan to signing a new employee bonus package, each activity that is seemingly insignificant, contributes to the economy every single day.

Modern economies are complex and intricate mechanisms. We have managed to come up with a system where finances and the demand and supply of goods and services, can be regulated day in and day out, while also remaining a mechanism that can be built on and added to. This is undoubtedly a stark contrast to economic activities in the past.

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Economic history in the past

In the past, economic activity remained a much simpler frontier. In the early days, the barter system took prominence. Good were trade for other goods, services were traded for other services, and sometimes goods were exchanged for services. The word ‘trade’ itself is an ode to this exchange of goods.

Each person contributed to the ‘economy’ with their own craft or area of expertise. For instance, if a butcher needed a chair, he’d trade a large slab of meat or several chickens for the chair, to a carpenter. Similarly, family members stuck to the same trade; so the goldsmith’s son would also apprentice under his father and become a goldsmith. In fact, some surnames in the modern day have originated as a result of these family-specific economic activities; Potter, Carpenter, and Smith are examples of such name creation.

Modern economic activity

Modern economic activity ermines far more advanced. Where previously, it was as simple as trading your good or service for another’s the modern method is governed by the use of currency, and not the exchange of goods.

General trading licences and financial analysis are common terms in modern businesses that may have sounded quite unusual for those in the past.

Where previously, any trade done with merchants form other nations was the only way in which trade extended out of the country borders, modern economies engage in many multilateral and multinational economic activities. Offshore company formation Dubai is also a depiction of how the current economies differ from the past. Offshore companies and their creation was not a possibility in the past, and traders and merchants remained within their set trade as well as the set land mass.

Although economic activity as a whole has changed drastically overtime, building complexity may not always be a good thing. Companies should therefore use their modern methods and take examples form the past to simplify their activities a bit more, to ensure that each and every activity is carried out seamlessly.