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Traditional economy


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Traditional economy

  1. 1. Traditional Economic System • A traditional economy is a system where traditions, customs, belief systems, and inheritance determine the answer to the three economic questions.
  2. 2. Examples of Traditional economies • Australian aborigines
  3. 3. The Mbuti in Central Africa
  4. 4. The Inuit of Northern Canada
  5. 5. Traditional Economies Traditional economies are found in rural, nondeveloped countries (approx. 400 million practice it) Customs govern the economic decisions that are made Modern technology is not used in traditional economies.
  6. 6. Traditional Economic Systems • The economy works through bartering and trading, and there is very little of that because so little surplus is produced. • Traditional economic systems are usually based on subsistence-based agriculture
  7. 7. Traditional Economies Economic activities are usually centered toward the family or ethnic unit; most produce only enough to keep their families alive. Little surplus exists
  8. 8. Advantages of Traditional economy • There is little to no uncertainty • Everyone knows what role to play • Life is generally stable, predictable, and continuous
  9. 9. Disadvantages of Traditional economies • Tend to discourage new ideas and new ways of doing things • Lack of progress lowers standard of living
  10. 10. Traditional Economies • Basic economic questions answered by what has been done in the past • Traditions are maintained • Ritual, Habit, and Custom
  11. 11. Traditional economies • Individual roles and choices are defined by the customs of elders and ancestors • These economies are usually based in societies of hunter/gatherers • Sharing is a big part of these economies