DEFINITION OF COMMERCE
COMMERCE IS THE STUDY OF HOW MAN ORGANIZES THE DISTRIBUTION AND EXCHANGE OF COMMODITIES SO AS TO SATISFY HIS NEEDS IN THE MOST EFFICIENT MANNER.
The word COMMERCE is made up of two Latin words, CUM (WITH) and MERX (MERCHANDISE), so that a lateral translation would be WITH GOODS. Therefore, this is certainly opt, since commerce is basically concerned with THE DISRIBUTION OF GOODS.
DESCRIPTIVE ANALYSIS OF COMMERCE DEFINITIONS
COMMERCE is defined in various approaches:
- A) COMMERCE AS A SOCIAL SCIENCE
COMMERCE is social science which is associated with TRADE AND AIDS TO TRADE.
-Commerce is a social science since it is related to human activity and social relations exchange of not only goods and services, but also opinions, attitudes etc.
-Commerce embraces all forms of PURCHASE AND SALE of goods and services with the intention of generating PROFIT.
-Commerce comprises various trading supportive activities (AIDS TO TRADE) e.g. transport, communication, insurance, banking, advertising etc.which facilitate trading activities
- B) COMMERCE AS THE REMOVER OF HINDRANCES
COMMERCE is the sum total of those human processes which are engaged in the removal of hindrances of persons, place and time in the exchange of goods and services. .
-Commerce is the sum total of human processes i.e. activities.
-Commerce, through TRADE AND AIDS TO TRADE is an economic tool that remove various barriers or restrictions which LIMITS the general processes of satisfying human needs through making, buying, selling and transferring of goods from where they are produced to where they are needed either for DIRECT CONSUPTION OR FOR FURTHER PROCESSING.
-Commerce, through removal of barriers through efficient exchange and distribution using effective transport, communication, warehousing, advertising etc enable deliverance of goods to consumers or industrial processors at right time, right place, right quantity, right quality etc.
- C) COMMERCE AS A BRANCH OF ECONOMICS
COMMERCE is a branch of a wider subject ECONOMICS consisting trade and other human activities such as transport, finance, insurance, banking, communication, market research and other human activities that helps people to exchange goods and services
-Commerce is a part of ECONOMICS. Economics is concerned with studying how man tries to satisfy his UNLIMITED WANTS using SCARCE RESOURCES. Man tries to satisfy his wants as efficiently as possible.
-Therefore Commerce tries to enable consumers to acquire those unlimited wants through buying and selling process facilitated by ancillaries or aids to trade.
-Commerce is also referred to as BUSINESS ECONOMICS in the sense that it is a part of ECONOMICS which involve the study of ECONOMIC ACTIVITIES such as production, exchange, distribution, and consumption of wealth i.e. goods and services while BUSINESS is any activity carried out with an intention of making profit. In this case commerce is both regarded as an economic activity basing on exchange and distribution of goods and services and as a business activity aiming at generating profit through buying and selling of goods and services.
- D) COMMERCE AS ORGANIZATION OF EXCHANGE AND DISTRIBUTIVE PROCESSES.
Commerce is the study of how man organizes the exchange and distribution of goods and services in order to satisfy his wants and needs as efficiently as possible.
-Commerce deals with ORGANIZATION of exchange and distributive activities through:
1) Organization of world’s productive resources e.g. land, labor etc
2) Organization of exchange and distribution e.g. channels of distribution, sales contracts, purchase contract etc
3) Organization of business undertakings e.g. sole proprietorship, partnership, companies etc
4) Organization of auxiliary services e.g. banking, insurance, transport etc
-Commerce though organization of exchange and distribution enable the MAXIMUM SATISFACTION OF HUMAN NEEDS AND WANTS.
NATURE OF COMMERCE
- A) SATISFACTION OF HUMAN NEEDS AND WANTS AS A PRIME AIM OF COMMERCE.
-The satisfaction of HUMAN NEEDS AND WANTS is the root of all economic activities.
-The aim of commerce is to achieve the most efficient distribution of goods and services so as to maximize the satisfaction of human needs and wants.
-HUMAN NEEDS are those things that man requires in order to keep his body working well. The basic human needs are food, clothing and shelter.
-HUMAN WANTS are the items though not necessary for the proper working of the body; they are desired in order to have a higher standard of living e.g. good education, better medication etc
–People seek to satisfy the human needs before they satisfy the human wants, they have to work as farmers,teachers,traders,doctors,engineers,accountants,,economists etc in order to EARN THE MEANS to satisfy their needs and wants. The needs and wants change according to the level of development and that people put effort to satisfy them accordingly as far as they are endless.
-Human needs and wants results to such efforts which in turn create goods and services which give satisfaction.
-Human needs and wants change according to social, economic, political and geographical conditions.
– The satisfaction of human needs and wants is the prime cause of all productive activity and millions of people throughout the world follow their daily occupations in order to satisfy their own needs and wants by satisfying the needs and wants of others.
- B) DEVELOPMENT STAGES TOWARDS HUMAN SATISFACTION OF NEEDS AND WANTS.
People in many centuries have undergone through various stages of development in aspiration to achieve maximum satisfaction of human needs and consumption i.e.
1) HUMAN SATTSFACTION IN THE PRIMITIVE SOCIETIES,
2) HUMAN SATISFACTION IN THE MODERN SOCIETIES.
1) HUMAN SATISFACTION IN THE PRIMITIVE SOCIETIES
At this primitive stage the following salient development features existed;
-Crude production
-Crude specialization
-Crude exchange.
CRUDE PRODUCTION
-In this context, crude production refers to the earliest form of production in which its operation is less -developed using poor productive forces.
-In primitive societies, productive forces were not developed. Division of labour was either non-existent or rudimentary. The standard of living in such communities was very low as far as people engaged in production referred to as DIRECT PRODUCTION i.e. production of goods and services for one’s own consumption.
-Under direct production each man in the society had to satisfy his own needs. He hunted for food, he found clothing and shelter for himself and there was NO COMMERCIAL TRANSACTION OR EXCHANGE OF GOODS-the producer himself was the consumer.
-In this simplest type of community there would be no commerce at all. An individual living entirely alone and with no contact with the world would be entirely dependent for his livelihood upon his own exertions.
CRUDE SPECISALISATION
-Also in this context, crude specialization refer to the earliest kind of specialization which is at very low stage in terms of its operation .This kind of specialization was particularly true in the primitive society.
-A certain measure of specialization would probably prevail, the mother looking after the home and children, the father and the older children taking over responsibility for providing food and, if necessary, undertaking the defense of the homestead.
-The tribe was simply an expansion of the family, and the degree of specialization expanded.
-As time went on people started to specialize in their activities such as hunters and weapon makers. The hunters were prepared to give sum of his hunted food in exchange for weapons and tools from weapon makers when they wanted them.
-So men began to depend upon each other’s skills. Each had enough time to practice his skills and to produce more than if each to rely solely upon his skills. In this way they began to exchange intensively i.e. simple exchange which improved their living standards.