Traditional Economy, Command Economy & Market Economy
A traditional economy is an economic system where customs, traditions and beliefs determine the goods and services created by the society. It is dependent on agriculture, hunting and gathering, fishing or any combination of the above. Also called a subsistence economy, it may involve use of barter trade instead of currency. Characteristics
Traditional economies are often based on one or a few of the following: agriculture, hunting, fishing, and gathering. Barter and trade is often used in place of money.
Often there is little surplus produced. In other words, most of the goods and services are fully used. Often people in a traditional economy live in families or tribes. Societies may follow herds of animals in order to hunt and sustain those in the traditional economy. Many people progress from hunters to farmers where they can place permanent structures and start a society.
Production of goods for people’s survival
Traditional economy is more about producing goods. This economic system supplies sufficient amount of foods to the people. It greatly reduces the amount of surplus or waste that typically would have occurred. Knowing People’s Role
In this particular economy, people can already recognize what their role in the society or community is. They need not to exert effort on a role which is not suitable for their skills and abilities thus no duplication of role or effort is evident on it. Less Destructive
Since traditional economy is more on the culture and belief of the people, it will always sustain an environment friendly surrounding that aims to give the people their needs effectively and accordingly without affecting the nature of the environment. Harmony Among The People
Traditional economy promotes cooperation and harmonious relationship. It provides people with equal chances to practiced working with other people harmoniously and with complete cooperation.
It is a vulnerable type of economy
Traditional economy is more prone to vulnerability due to the continuous changes in the weather condition. This greatly affects the supply of the foods and services to the people. When this economy continues to become vulnerable, there would be a greater possibility of vulnerability not only on the foods and its services but also in its customs, beliefs and traditions. Capability to change
Since traditional economy is greatly based on customs and other society’s beliefs, there would be a greater chance for this economy to change as these aspects also changes. All the aspects that were just taught by some of their ancestors would be the only important things that people would be using and they will no longer adopt new aspects in the society for their improvements. Lower standards of wealth and living of the people
People in the traditional economy are not highly specialized in living a wealthy life. Low standards that they are practicing can be seen when people are being asked to have a job which they do not like and beyond their skill and capabilities. This is because they are only relying on their ancestor’s custom and tradition. Traditional economy is very systematic in providing immense foods and even services to the people. Although more people are really more of getting involved with the modern type of economy, knowing some of the advantages and disadvantages of this traditional economy would is still important. Command Economy
A system where the government, rather than the free market, determines what goods should be produced, how much should be produced and the price at which the goods will be offered for sale. The command economy is a key feature of any communist society. China, Cuba, North Korea and the former Soviet Union are examples of countries that have command economies. Characteristics
The government creates a...
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