Advantages And Disadvantages Of Traditional Economy

The economic system, traditional economy, which is the first and the oldest system appears from the ancient age of human beings. The main production is hunting, gathering, fishing, and agriculture. Its characteristics consist of making economic decisions by the guides from experiences of the elders, producing goods for what people need, and the most unique thing is that this system has no currency (Kimberly Amadeo, 2017). So how do merchandises or customers buy something such as bread or meat? The way to get the goods is that people exchange what they have, which called barter. In fact, traditional economy has some disadvantages and there are only a few countries and indigenous tribes applying this system in the world at the present. They†¦show more content†¦The last disadvantage is that people only produce for what they basically need. Their daily products depend on fishing, hunting, and agriculture; but once the winter comes, there is no way to grow foods, or the animals immigrate every year that makes hunting and fishing impossible. The problem is that they produce limitedly, which means no leftovers. It is due to the fact that people reserve foods for winters; however, they cannot create wealth and their life standard just stays in a low range because there are only a few leftovers. Benefits of Traditional Economy Once again, people only produce goods and services which are essential for survival. This is also an advantage which resources are not wasted while producing goods and services. For example, there are 100 villagers and each of them needs 2kg of fish. Then the fishers must catch at least 200kg of fish. If they cannot consume more than 200kg, then those reserve fishes will be spoiled. Also, people in traditional economy know exactly what their roles or jobs are, which causing no unemployment because they will do a particular job based on their abilities and skills. Additionally, they can trade their products when doing their job to get other products. But if they are unsatisfied of their job, they can find another one instead of protesting. This because they know theShow MoreRelatedMarket Economy988 Words   |  4 PagesPrinciples Practices, one of the disadvantages is â€Å"that it does not provide for the basic needs of everyone in the society.† That is true, but with the assistance from some government services such as Social Security and Medicare, the people will be helped and still remain free to purchase and buy what they want. Another disadvantage that is stated is the possibility of economic failure. The economic could fail if there is not enough competition. 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