Question

Which of the following is a basic characteristic of traditional trading networks?

• A. They only dealt in cash payments.
• B. Traditional banks were basically nuclear family firms.
• C. Trading and banking activities were organised through caste and kinship relations.
• D. The economic activities of these groups represented a kind of ’European capitalism’.

Answer 1

The Correct Option is C

Traditional trading networks often relied on social structures such as caste and kinship, facilitating trade and banking through established personal relationships rather than formalized institutions.

Answer 2

In traditional trading networks, especially in pre-modern and early modern societies, economic activities, including both trade and banking, were often organized through caste and kinship relations. This system was based on familial and social ties, where individuals from the same caste or kinship group would engage in commercial activities. The trust and mutual obligations inherent in these relationships played a significant role in facilitating trade and finance.

Here’s why the other options are incorrect:

(A) They only dealt in cash payments: This is not accurate as traditional trading networks often relied on barter systems, credit, or informal payment mechanisms rather than cash transactions.

(B) Traditional banks were basically nuclear family firms: Traditional banking networks were often broader and involved extended families or entire communities, rather than just nuclear families.

(D) The economic activities of these groups represented a kind of ‘European capitalism’: This is a misrepresentation, as traditional trading networks in many parts of the world did not follow the principles of European-style capitalism, which emerged much later in history and was distinct from the more community-based and trust-based networks of earlier times.

Thus, (C) is the most accurate reflection of the characteristics of traditional trading networks.