A traditional economy is typically based on fishing, hunting, agriculture, gathering or a combination of one or more of these trades. A traditional economy is governed by traditions that have developed through out time. For example instead of money a traditional economy uses barter practices, so two fish may be worth two bushels of grain. Families, tribes or groups may have the tradition of trading with each other based solely on geographical locations.
Pros of a Traditional Economy
1. Simplistic Economy
In this type of economy everyone has clear expectations of what they are supposed to do and what they can get for what they do. In other words a fisherman knows that he has to catch X amount of fish per season to have enough for his family to eat and have enough to trade for the things that he can not get from the sea like animal skins. Very rarely in this type of economy does the son of the hunter fight to become a farmer. Everyone has their role and they are clear on what it is. It makes for a much simpler life.
2. Better For The Planet
The traditional economy is the first “green” way to live. In these type of economies people only take what they need and what they can use. They do not aspire to abundance. The main goal in this type of economy is focused on the basics, food, shelter, water, companionship. It is a much more sustainable way to live for the planet. People have to be more invested in the care of the planet when they rely on it completely without any other option for survival.
3. People Work Together
In this type of economy competition is relatively low. Since everyone has their role and they know what it is there is not a lot of in fighting. People are more apt to help one another instead of compete with one another. They may share the work load more equally since everyone has the same goals for survival.
Cons of a Traditional Economy
1. Mother Nature
In a traditional economy mother nature plays a huge role. While it can be devastating for any farmer to lose their crop in more advanced economies there are safety nets in place that will replenish their finances and keep their families from going hungry. In the traditional economy, one or two bad seasons and people starve because it is not just the crops that suffer but the hunting and the gathering that suffer as well. There is no special social program that can help carry the people over. They are very dependent on the earth to help them survive.
2. At Risk Of Being Over Powered by Larger Economies
Traditional economies are usually relatively small scale operations. These groups are at risk of losing their natural resources to larger economies that want to come in and take them or that misuse the land and leave it uninhabitable. A good example is the diamond mines in Africa that have been over mined spoiling the land with pollution and bringing chaos to the countries in Africa that had a traditional economy before the diamond mines.
Pollution has had a huge impact on traditional economies. When larger, more powerful groups use the natural resources that these economies depend on it interrupts not only their way of life but it can also leave damage behind to the land leaving it no longer useful. They can easily be overpowered.
3. Shortage of Population
People that live in traditional economies do not have the barter power to get the proper health care which reduces their life expectancy. Infant mortality is relatively high because of the lack of health care. This creates a shortage in population growth when compared to other types of economies. This shortage in population leaves them less able to defend themselves against invasions and war tactics.
The potential to suffer from very curable disease living in a traditional economy is relatively large. The spread of disease is also a problem because of poor sanitation practices and adequate housing to protect from the elements is not available.
4. No Choices
While it is a simple life it is a life based on one thing, survival. Every single day in this economy one has to be hyper aware of surviving. There are not a lot of choices. You are born to do what you do and whether you like it or not you accept it and do it because that is what your family depends on to live. Often if someone in this type of living arrangement does not agree to do what they are supposed to do they are shunned or somehow punished.
5. No Changes
People that live in a traditional economy tend to be very resistant to changes because they tend to believe that their way is the best way since it has been handed down through the generations. This belief system can stymie the countries growth and reduce options greatly for a higher standard of living.
6. Lower Standard of Living
When your day is based around meeting the key factors of survival it leaves very little time for things that bring you joy. The standard of living is usually much lower. Houses are typically constructed by hand and consist of one or two rooms. Most of the members do not own mechanized transports. Electricity and other modern conveniences are usually absent. There is not a lot of leisure time everything is work centered.
Often people that live within a traditional economy are viewed by developed western culture and living in poverty when usually their basic needs are being met. Usually this type of economy is found in third world countries in Asia, Latin America and Africa. There are areas of these types of economies everywhere in the world.
It is presumed that all other economies got their start as a traditional economy and that these types of economy will evolve into command, market or mixed economies over time. There are pros and cons to any society. If traditional economies existed within a vacuum free from the imposing forces of the rest of the world they still would not likely thrive beyond a certain point. At some point the economy like the people evolves. It is almost a necessity for the economy to evolve so that the people can evolve. History has taught us when societies do not evolve and grow the culture dies off.
It may seem that it is almost an ideal way to live, never take more than you need, live to make it through the day and not have to worry about your earning power but the cons are also clear. The traditional economy is the basis for all other economies it has been a long standing building block for the evolution of societies.