trade

Exchange of commodities between groups, individuals, or countries. Direct trade is usually known as barter, whereas indirect trade is carried out through a medium such as money.

In the 17th and 18th centuries, for example, barter between Europeans and West Africans was based on units of value called sortings. A sorting might consist of a quantity of cloth or oil. The amount of goods in each sorting varied according to supply and demand.

International trade patterns have evolved out of the relationships between European and North American countries and their former colonies. Less economically-developed countries (LEDCs) in South America, Asia, and Africa supply raw materials to more economically-developed countries (MEDCs) for manufacturing into goods. Once manufactured, the raw materials fetch a greater price. The Industrial Revolution, by creating a manufacturing sector, widened the economic disparity between LEDCs and MEDCs. Efforts to improve the economy of an LEDC focus on the development of a manufacturing sector.