A traditional economy is an economy based on custom and tradition. The economic system in which resources are allocated by inheritance, has a strong social network and is based on indigenous technology and methods. Although this type of economy has been converted to mixed, command, or market technologies in many societies that were once traditionally driven; over 400 million people across the globe still practice this methodology, as researched by the World Bank. The techniques may be outdated.
This type of economy ensures that every member of society has a purpose and as well, a participatory function in society. This brand of economics also provides less of a demand on the resources of the earth because goods are usually only produced if they will be consumed, hence, there is a lack of over consumption and surplus such as can be found in many other economic systems.
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Categories: Other economic systems |
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