# Barter

## Definition
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is a form of trade that predates the use of money.

## Source Chapter
Book 1, Chapter 4

## Context
Smith explains the limitations of the barter system, especially in a society where the division of labour is prominent. These limitations, according to Smith, led to the development and use of money as a common medium of exchange.

## Economic Domain
Economic Anthropology, Economic History, Microeconomics