Pros and Cons of Traditional Economy The economy is the heart of any country, any society, and any community. Without a fostering economy, one can’t sustain as there will be no production of goods and services. There are numerous types of economic models followed in different countries among which capitalist, socialist, communist, and market economies are the popular ones. Today, we will have a look at the traditional economy definition, understand what exactly it is, and know the pros and cons of traditional economy. There is one more economic model which is the oldest of all of them and which prevails in some of the underdeveloped countries of the world today, it is called the traditional economy (also called conventional or customary economy). So, keep reading and know about it in detail.
What is the Traditional Economy? The traditional economy is usually found in underdeveloped countries. It is a way of life for the people in underdeveloped countries. It is an economy that doesn’t operate under the motive of making money but makes sure that all the people of the community have work and enough goods to sustain. The traditional economy depends on the customs and traditions prevailing in the society. People of the community, region, or culture participate in this economy and do bartering of the goods and services. Goods and services are sold not with money but with the bartering system. In a bartering system, one good exchange for another good. For example, someone who produces wheat will exchange it with someone who needs it not with money but with some other good like fruits or vegetables.