The benefits of a traditional economy

Different economies mean that there are different forms of governance under a particular economic system. Natural-communal forms based on communal management and the natural distribution of the product created are preserved in a number of countries. Small-scale production is of great importance. It is based on the personal ownership of the sources of production and the personal affairs of their owners. In countries with a traditional system, small-scale production is represented by many peasant and craft farms that dominate the economy.

In the context of relatively underdeveloped national entrepreneurship, foreign capital often plays a major role in the economies of the countries under consideration.

Centuries-old customs and traditions, religious and cultural values, caste and property divisions predominate in the life of a society and hinder social and economic development.

The solution of major economic problems has its own characteristics within different structures. The traditional system is distinguished by such a feature - the active role of the state. Through the redistribution of a large part of national income through the budget, the state allocates funds for infrastructure development and social support of the poor. Traditional economics is based on traditions passed down from generation to generation. These traditions determine for whom and how the goods and services are produced. The list of benefits, production technology and distribution is based on the traditions of the country. The economic roles of members of society are determined by heredity and caste affiliation. This type of economy is maintained today in a number of underdeveloped countries where technological progress is facing great challenges, as it usually disrupts the traditions established in these systems.

The benefits of a traditional economy

stability;

ability to predict;

quality factor and numerous benefits.

Disadvantages of the traditional economy

vulnerability to external influences;

inability to improve oneself, to progress.

Special features:

ultra-primitive technologies;

distribution of manual labor;

all major economic problems are solved according to centuries-old traditions;

the organization and management of economic life is carried out on the basis of decisions of the council.

Traditional economic system: Burkina Faso, Burundi, Bangladesh, Afghanistan, Benin. These are the least developed countries in the world. The economy is focused on agriculture. In many countries, the division of the population in the form of national (people) groups prevails. The gross national product per capita does not exceed $ 400. The economies of the countries are mainly provided by agriculture, rarely by the mining industry. Not everything that is produced and mined can feed the people of these countries. Unlike these countries, there are also high-income but agricultural-oriented countries - Azerbaijan, C Kte d’Ivoire, Pakistan.