What is Traditional Economy: How it Works | Pros & Cons | 2022 Reviews

In a traditional economy, the structure is centered on customs, culture, and values that are honored over time. Tradition controls economic choices like manufacturing and distribution.

Traditionally economy systems rely upon, or some combination of, agriculture, fishing, hunting, gathering. Instead of getting money, they use barter.

Inuit, Africa, and South India are communities known globally to practice the traditional economic systems.

What are the disadvantages of a traditional economy?

The perks and drawbacks of the traditional economy are very distinctive. Under this form of economy, little waste is produced because individuals struggle to generate what they need. That is also a drawback since the population group can starve if there is no way to satisfy production needs. 

Is traditional economy bad?

Traditional economies restrict population growth tactically. It works this way; people die when the harvest or hunting is bad. They are also prone to economies of demand or order. The natural resources traditional economies depend on to wage war are also consumed by these communities.

What is Traditional Economy?

According to Wikipedia, traditional economy is an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rules and manner of their distribution.

It is a system based on customs, history and time-honored beliefs. Countries that use this type of economic system are often rural and farm-based. Also known as a subsistence economy, a traditional economy is defined by bartering[citation needed][dubious – discuss] and trading. A little surplus is produced[citation needed] and if any excess goods are made, they are typically given to a ruling authority or landowner.

A pure traditional economy has had no changes in how it operates (there are few of these today). Examples of these traditional economies include those of the Inuit or those of the tea plantations in South India.

Traditional economies are popularly conceived of as “primitive” or “undeveloped” economic systems, having tools or techniques seen as outdated. As with the notion of contemporary primitiveness and with modernity itself, the view that traditional economies are backward is not shared by scholars in economics and anthropology. Two current examples of a traditional or custom-based economy are Bhutan and Haiti.

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Traditional economies may be based on custom and tradition with economic decisions based on customs or beliefs of the community, family, clan, or tribe.

How it Works

This economic system thrives on the traditions and cultures of the people. The practice is often determined by the beliefs, cultural ties, and age-long hand-down practices of the community.

As mentioned by Study.com, a traditional experience is characterized by;

  1. Traditional economies are often based on one or a few of agriculture, hunting, fishing, and gathering.
  2. Barter and trade are often used in place of money.
  3. There is rarely a surplus produced. In other words, most of the goods and services are fully used.
  4. Often, people in a traditional economy live in families or tribes.
  5. Societies may follow herds of animals in order to hunt and sustain those in the traditional economy.
  6. Many people progress from hunters to farmers where they can place permanent structures and start a society.

Traditional Economy 2022 Reviews

Pros and Cons

The advantages and disadvantages of a product, idea, etc, should inform intending users of the wisdom in subscribing to the idea or product or not.

I always advise that where the pros outweigh the cons, it’s okay to subscribe to such a product. However, where the cons outweigh the pros, then it is time to take a deep breath, pause, pause again, then walk away.

I would not be comfortable, advising you to pursue any idea that offers you more cons than pros. Having established that background, it is imperative to look at the pros and cons of the traditional economy.

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The question is, what does it hold for a society?

PROSCONS
1. Transparency in allocation of resources:
In traditional economies, custom and culture form the backbone. This just means that everybody knows their position in manufacturing and as such, understands what they’re going to get.  
1. It depends on Mother Nature:
When Mother Nature does not participate, even advanced economies with farming in place suffer. Each weather disruption can lead to a loss of crops, resulting in a loss of income and therefore no profits received during the season for hard work. For traditional economies, the same can be said, as they still need crops and other commodities to keep their families from starving. As hunting and harvesting are affected, a bad season or two has a negative impact on traditional economies. Perhaps worse, they probably don’t have a support program that will help tide them through the good season to come.  
2. It is a more natural and sustainable economy:
In order to produce food and goods, a traditional economy doesn’t require the use of modern conveniences. As a consequence, they are less environmentally harmful. Also, much of the time individuals only catch the right amount to harvest or farm to ensure their family is fed. They only catch enough fish, for instance, to feed their families, which is different in modern economies that rely on finding more to meet demand.  
2. It can be hazardous to the environment:
Relying on the climate can be a blessing for those in conventional economies as well as a curse. Although they may not employ the procedures present in modern communities, when farming, fishing, and other operations are taken up a notch, they too cause harm to the climate.
In Haiti, for instance, two-thirds of the population depend for their livelihood on subsistence farming. As their primary fuel source, they are largely dependent on wood. Forests have been stripped of trees as a result. And the community and the forest itself are vulnerable to natural disasters when there aren’t a lot of trees.
3. It encourages peace, unity, and cooperation:
In this kind of economy, the competition is very poor. Everyone knows what their tasks are and less combat is anticipated as a consequence of that. So rather than competing with each other, individuals typically help each other out. They all have the same survival goals, which means that the workload is evenly shared between the participants.  
3. It is not subject to alteration:
In traditional economies, culture plays an enormous role, and people living in this form of society are unwilling to adjust as such. They are so profoundly rooted in their traditions that any sort of change or creation is resisted. As a result, their nation’s progress is hampered. As a result, relative to other countries, there is a lack of population growth. When they have to defend themselves from the invasion of their lives, this puts societies at a disadvantage.
 4. Bigger economies can conquer it:
Small-scale operations are conventional economies, and they are constantly at risk of losing the natural resources that they depend on for larger economies. Some people have become too selfish to care about the implications of overdoing things with modern technologies, and as a result, we mostly forget that there are smaller societies that rely on the resources we want. The diamond mines in Africa are one clear example of this. They have been over-mined, contributing to pollution and instability in African countries. Some people ignore the fact that they are interrupting the way of life of the societies they have invaded by being so concentrated on gains.  
 5. It does not encourage a safe way of living:
Many people living in traditional societies do not have access to health insurance, which decreases their life expectancy as a result.
A baby who does not receive the necessary care, for example, ends up contributing to the relatively high mortality rate in situations like  
Traditional Economy

Conclusion

Technology has ousted the place of the traditional economy and for me, technology makes life easier for all of us. Thus, my thoughts are that the traditional economy is relegated to history and not discussed as a possible option for the 21st century.

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Also, because the cons gravely outweigh the pros, a traditional economy should not be adopted as an option even.

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