Traditional Economy
A ​traditional economy​ is a system where ​traditions, customs,​ and beliefs shape the
goods ​and products the society creates. The custom of sharing and collaborating for the
good of the society defines a traditional economy. Technology and independence are
shunned in favor of traditions that have been refined over the years.
Countries that use this type of economic system are often rural and farm-based and is often
fueled by the agriculture of whatever region it is in. Also known as a ​subsistence
economy, a traditional economy is defined by​ ​bartering ​and trading. Basic necessities are
sometimes traded, but goods are rarely bought and sold. Hunting, gathering, and
cultivation are the main tasks for workers in a traditional economy. Little ​surplus ​is
produced, and if any excess goods are made, they are typically given to a ruling authority or
landowner.
It is most common in developing nations with emerging marketplaces. There are big parts
of the world's population that still work in traditional economies, primarily in third-world
countries with larger ​indigenous ​populations. The Inuit tribe of northern Canada is one
example of a society that still uses a traditional economy. Families teach their children the
same customs and ​allocation ​of resources that have been practiced for hundreds of years.
Children in this society are taught how to hunt, fish, make tools, and build shelter.
Underdeveloped areas of South America, Africa, and Asia still rely on this type of economy
for survival as . As neighboring countries and influences permeate a traditional economy,
the economic system can morph into a mixed, command, or market economy.
The Pros of a Traditional Economy
Less Destructive
Century long traditions are often at the root of these economies. The goods are not as much
“produced” as they are ​harvested​. This causes much less impact on the environment and
allows the markets to be completely ​self sustaining​. Also, because goods are only made for
survival, the country's ​natural resources​ may not as compromised as in other types of
economies.
Strong Sense Of Community
Each person has a vital role in these economies, producing very tight knit and close groups
of people. They have to support on each other, selfishness is very rare as well as greed.
Social bonds are thus deepened, people typically feel more unified with the society, and a
sense of worth often increases.
Vital Needs Met
While the lifestyles of the people living in these economies may not be glamorous in the
normal ways that we are used to, they do work. All of the basic necessities of life are
provided, by themselves. Along with living a wholesome life, they often take much pride in
the work that they do and the places that they live.
The Cons of a Traditional Economy
No Change
The traditions are so deeply rooted in these economies that they strongly resist any form of
change or growth. This hinders the growth of their nation and the world.
Lower ​Standard Of Living
Because the people are only really concerned with the basic necessities of life, they live a
very basic, and often somewhat impoverished lifestyle. This is bad for the children
specifically. Their education and health are at risk. Individuals tend to remain in set roles in
a traditional economy, and their financial well-being rarely increases. Indeed, most of those
living in this type of economy find themselves mired in poverty for their entire lives. In his
book titled ​Capitalism at the Crossroads​, Stuart L. Hart writes that four billion people may
exist in traditional economies.
Unpredictable Problems
Things like weather, natural disaster, and bad crops all impact the society deeply. People
often starve, production drops dramatically, and sickness runs rampant through these
societies.