Commerce

Commerce is the large-scale organized system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered distribution and transfer of goods and services on a substantial scale and at the right time, place, quantity, quality and price through various channels from the original producers to the final consumers within local, regional, national or international economies.[1][2] The diversity in the distribution of natural resources, differences of human needs and wants, and division of labour along with comparative advantage are the principal factors that give rise to commercial exchanges.[3]

Commerce consists of trade and aids to trade[4] (i.e. auxiliary commercial services) taking place along the entire supply chain. Trade is the exchange of goods (including raw materials, intermediate and finished goods) and services between buyers and sellers in return for a offer price at traditional (or online) marketplaces. It is categorized into domestic trade, including retail and wholesale as well as local, regional and inter-regional transactions and foreign trade, encompassing import, export and entrepôt/re-export trades. On the other hand, auxiliary commercial activities (aids to trade) which can facilitate trade include commercial intermediaries, banking, credit financing and related services, transportation, packaging, warehousing, communication, advertising and insurance. Their purpose is to remove hindrances related to direct personal contact, payments, savings, funding, separation of place and time, product protection and preservation, knowledge and risk.

The broader framework of commerce incorporates additional elements and factors such as laws and regulations (including intellectual property rights and antitrust laws), policies, tariffs and trade barriers, consumers and consumer trends, producers and production strategies, supply chains and their management, financial transactions for ordinary and extraordinary business activities, market dynamics (including supply and demand), technological innovation, competition and entrepreneurship, trade agreements, multinational corporations and small and medium-sized enterprisess (SMEs), and macroeconomic factors (like economic stability).

Commerce drives economic growth, development and prosperity, promotes regional and international interdependence, fosters cultural exchange, creates jobs, improves people's standard of living by giving them access to a wider variety of goods and services, and encourages innovation and competition for better products. On the other hand, commerce can worsen economic inequality by concentrating wealth (and power) into the hands of a small number of individuals, and by prioritizing short-term profit over long-term sustainability and ethical, social, and environmental considerations, leading to environmental degradation, labor exploitation and disregard for consumer safety. Unregulated, it can lead to excessive consumption (generating undesirable waste) and unsustainable exploitation of nature (causing resource depletion). Harnessing commerce's benefits for the society while mitigating its drawbacks remains vital for policymakers, businesses and other stakeholders.

Commerce traces its origins to ancient localized barter systems, leading to the establishment of periodic marketplaces, and culminating in the development of currencies for efficient trade. In medieval times, trade routes (like the Silk Road) with pivotal commercial hubs (like Venice) connected regions and continents, enabling long-distance trade and cultural exchange. From the 15th to the early 20th century, European colonial powers dominated global commerce on an unprecedented scale. In the 19th century, modern banking and related international markets along with the industrial revolution fundamentally reshaped commerce. In the post-colonial 20th century, free market principles gained ground, multinational corporations and consumer economies thrived in U.S.-led capitalist countries and free trade agreements (like GATT and WTO) emerged, whereas communist economies encountered trade restrictions, limiting consumer choice. Notably, developing countries saw their share in world trade rise from a quarter to a third by the century's end.[5] 21st century commerce is increasingly technology-driven (see e-commerce), globalized, intricately regulated, ethically responsible and sustainability-focused, with multilateral economic integrations (like the European Union) or coalitions (like BRICS)[6] leading to its reconfiguration.

  1. ^ "Commerce". Oxford English Dictionary (Online ed.). Oxford University Press. (Subscription or participating institution membership required.)
  2. ^ James Stephenson (1942), Principles and Practice of Commerce, London: Sir Issac Pitman & Sons, Ltd, p. 95
  3. ^ James Stephenson (1942), Principles and Practice of Commerce, London: Sir Issac Pitman & Sons, Ltd, p. 14
  4. ^ Jonathan Law, ed. (2016), A Dictionary of Business and Management (6th ed.), Oxofrd University Press, p. 26
  5. ^ IMF Staff (November 2001). "Global Trade Liberalization and the Developing Countries". International Monetary Fund.
  6. ^ Bas Hooijmaaijers (2021), "China, the BRICS, and the limitations of reshaping global economic governance", The Pacific Review, 34 (1): 29–55, doi:10.1080/09512748.2019.1649298

From Wikipedia, the free encyclopedia · View on Wikipedia

Developed by Nelliwinne