Traditional economies

2.500

To an economist, economic society presents itself as a mechanism for survival – a means whereby people are able to carry out the tasks of production and distribution. If we look at the different political and social structures which exist in the world today, and the way in which those systems have developed over the years, we are tempted to say that people have made use of, and are making use of, a very great varieties of economic systems. In fact, in spite of the appearance of great variety, it is a possible to group these different economic structures into four broad categories. These basic types of economic organization are usually described as Traditional economies, Market economies, Command economies and Mixed economies.

Traditional economies

The oldest and until fairly recent times by far the most common way of solving economic problem was that of tradition. In traditional societies, people use methods of production and distribution that were devised in the distant past and which have become the accepted ways of doing things by a long process of trial and error.

In these societies we find that the division of land among the families in the village or tribe, the methods and times of planting and harvesting, the selection of crops, and the way in which the produce is distributed among the different groups are all based upon tradition. Year by year, little is changed; indeed a change in working procedures may well be regarded as an affront to memory of one’s ancestors or as an offence against the gods.

The basic economic problems do not arise as problems to be discussed and argued about. They have all been decided long ago. One follows the path that one was born to follow; a son follows in the footsteps of his father and uses the same skills and tools. A caste system provides a good example of the rigidity of a traditional society. The production problems (i.e. What? and How?) are solved by using land as it has always been used and the worker carrying out the traditional skills according to his or her fixed place in social structure. The distribution problem (For Whom?) is solved in a similar manner. There will be time-honoured methods of sharing out the produce of the harvest and hunt. The elders, the heads of families, the women and the children will receive shares according to ancient custom.

Traditional solutions to the economic problems of production and distribution are encountered in primitive agricultural and pastoral communities. But, even in advanced countries, tradition still plays some part in determining how the economy works. We are familiar with industries in which it is customary, for the son to follow his father into a trade or profession, and in Britain equal pay for women did not obtain legal sanction until the 1970-s.