MODULE Principles OF ECONOMICS
PROGRAMMEBSC HONOURS MEDIA AND SOCIETY STUDIES
PRESENTATION QUESTION: Types of economies
Societies have developed different broad economic approaches to manage their resources. Economists generally recognize four basic types of economic systems—traditional, command, market, and mixed. “Economics is the study of the use of scarce resources to satisfy unlimited human wants” (Lipsey, Courant, Purvis and Seiner 1993:5) In the traditional System the economy is based on tradition, customs and habits where the young men and women simply follow their parents’ line of work. For instance if the father is a blacksmith the son also becomes a blacksmith. Such tenets nowadays are observed in the rural areas where development is yet to be realised. Under this system, according to (Lipsey etal 1993) peasants, artisans and most others living in the village inherited specific positions in the society. In Rushinga, where this writer hails from, people still depend on the beating of the drum as a medium of communication. There is a certain way of the drum beat that signifies the death in the village. The work that is done by the people and the goods and services they produce and provide follow long-established patterns. This type of economic system is not very dynamic—things do not change very much. Standards of living are static and individuals do not enjoy much financial or occupational improvement. But economic behaviours and relationships are predictable. You know what you are supposed to do, who you trade with, and what to expect from others. Mohr, Fourie and Associates (2004) affirm that this system is rigid, slow to adapt to change and resist to innovation. In traditional economies, community interests take precedence over the individual. Individuals may be expected to combine their efforts and share equally in the proceeds of...