The traditional economy is a society where economic decisions are guided by customs. It relies on hunting and fishing and uses a barter system for trade.
It is often based on one or a few agricultural produce, hunting, fishing, or gathering. The commodities are used in place of money. There is normally an exchange of goods with other goods.
Pros of Traditional Economy
- It is environmental friendly
The goods that are exchanged are the ones from the farms and this makes it possible to have minimal pollution as they do not undergo any processing before they are exchanged.
- It reduces wastage
The people with surplus give it away to others who need it and this reduces wastage of the food products as it is utilized well.
- It is shaped by traditions
The traditions are involved in the economy and this makes it possible for a specific community to produce goods that are well known for traditionally.
- It can use barter instead of money
Tradition economy can use barter instead of money and this allows the people who do not produce certain goods to be able to get them without a struggle.
- It fosters togetherness and cooperation
When people come together to exchange goods they learn how to live with others well as they will talk and agree and this may bring up society that cooperates with one another hence easy to assist each other in times of need.
- The distribution of resources is well known
Customs and traditions form the backbone of the traditional economy. This makes it easier for every community to know what they are to produce and how to do it hence easy to produce it.
- It revolves around the family
The skills are passed from one generation of the family to another and this makes the skill only to be known by the family.
- It allows movement and freedom
People are not restricted to where they can go to as they can move to any place to acquire the skills they desire and exchange with the community they want.
- Minimal economy friction is experienced
As the community deals with different products, there is minimal friction in the economy as each community will deal with what they are supposed to deal with.
- It focuses on the skills of an individual
The community only focuses on the skills they are to learn and they pass them to the next generation and this makes them easily perfect the skills.
Cons of Traditional Economy
- It does not promote a healthy way of life
Some traditions only allow the community to practice one economic activity. This allows the community to only deal with one thing and this may make them have it as their only diet and hence not having a healthy way of life.
- It can be overpowered by large economies
Traditional economies normally deal with small scale production. When there is large scale production, they may face competition and this may make them not be able to exchange their goods with other communities.
- It cannot easily change
The communities cannot change easily to other economic activities and this may make them lag behind economically as they may not change to other things that are economically beneficial.
- It can affect the environment negatively
When a certain community continuously does something that is not environmentally friendly, it may end up affecting the whole area. For instance, those that rely on hunting may kill all the animals eliminating the species in the ecosystem which may affect the environment.
- The population may suffer if there is no way to fulfill the needs
The population is bound to suffer as they depend on one economic activity that if it does not turn out well then the whole population is bound to suffer the consequences.
- It can be affected by nature
The communities that deal in agriculture can be affected when the climate does not favor their products and this may make the whole population suffer at the end as they do not diversify.
- It places communities at risk of infectious diseases
The population may suffer from an infectious disease. This is because eating the same type of food can lead to them having low immunity hence in case of an outbreak the whole population may suffer from the disease.
- It offers few options to expand personal horizons
People may not be able to expand their personal horizons as they may fear that they may be deviating from the norms. This makes them stick by what the community does.
- It may be faced with a high infant mortality rate
The economy lacks access to modern medical care and this results in the death of many children hence affecting the generation of the economy.
- It does not allow genetic engineering
With this type of economy, it is not possible for the community to practice genetic engineering and come up with better crops that are resistant to diseases hence lowering their production rates.
The traditional economy used to be good when there was no technology. During this error of technology communities should embrace better ways of improving their economy so that they may be at the same level with others hence improving the economy of the country generally.