Traditional Economic Systems
What is A Traditional Economic System?
A traditional economic system is one in which "families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down from generation to generation".
Pros And Cons
A traditional economy has many pros for the group as a whole, like how everyone has a set job and standard of living depending on what they produce. Most everything that is produced is a need and not a want, like food and necessities. Each person in a tribe, clan or family trade with each other for what they need, and with everyone doing so in the manner they say as tradition, everyone gets along and gets what they need in the end to live a 'happy life'.
There are some cons too. Unfortunately supplies are heavily reliant on the weather causing their economy to be considered less rich in wealth and diversity. People who live in traditional economies also do not tend to go outside of their predetermined skill, much like the caste system in India, resulting in the risk of losing a skill as a whole and dooming the entire group of people.
Three Basic Questions
What is produced?
In a traditional community, the essentials of life are produced such as food, supplies, and lodging.
How is it produced?
Most traditional economies follow the same ways they have used for a long time, so by whatever they found needed is what they produce.
Ex. Fish in a fishing village, milk if they have cows.
Who is it for?
Everything made in the tribe, clan, or family is traded among each other to assure everyone has what they need to survive. If in their tradition, they may even trade with another tribe, clan, or family to obtain new goods which could help improve one or both groups that are trading.
Is It still around?
Around the modern world, it is near impossible to find a traditional economy outside of video games; But in lesser known parts of the world there are still places that use this economic system to thrive in their own way. Some tribes in rural Africa, India, China, South America and Middle America still use their traditional economic system though the numbers of places where it can be found is grower smaller every year as people from the modern economic world attempt to help them develop their economies further.