Answer to Question #232134 in Economics for CCW

Question

Traditional Economic System:

Read paragraph + answer following questions

1. Who controls factors of production?
2. Describe this system, using important vocabulary words found in reading
3. Where might you find this system in world today?

Link: https://drive.google.com/file/d/1sjS2yoJMMtzPEqIM3mvbrL0iovSBm3qh/view?usp=drivesdk

Answer 1

The traditional economic system is characterized by the predominance of peasant and handicraft farms, where descendants inherit the occupations of their ancestors. The main feature of this economy is that property belongs to individual farms, and each owner has the right to dispose of his own resources.

Signs of a traditional economy are:

slow introduction and development of modern technologies;

power is built on traditional tribal relations;

semi-feudal social and economic system;

widespread use of manual labor is characteristic;

farms make up the bulk of the economy;

the extractive industry is absent or undeveloped;

the exploitation of the lower classes and restriction of their rights and freedoms;

science does not develop;

only a small stratum of society, which is the ruling elite, can get an education;

religious or military pressure is exerted on the political views of the people.

The main characteristic of the traditional economic system is considered to be a low degree of development of production technologies, which is due to low labor productivity. The traditional economy inherent in this type of economy is subsistence farming (dominated by farming, hunting, gathering). The introduction of modern technologies is destroying the foundations of such an economy.

The traditional system is characterized by a weak economic connection between settlements. This interferes with the stable development of the economy and forces people to take on hard physical labor. The signs include the traditional communities themselves, which are a condition for the survival of a large group of people but hinder progress.

Currently found in underdeveloped countries in Africa.