Traditional Economy 2

Advantages

There is little friction between members. That's because custom and tradition dictate the distribution of resources. Everyone knows their contribution toward production, whether it's as a farmer, hunter, or weaver. Members also understand what they are likely to receive. Even if they aren't satisfied, they don't rebel. They understand that it's what's kept the society together and functioning for generations.

Since traditional economies are smaller, they are less destructive to the environment. The culture ensures that they are sustainable.

Disadvantages

Traditional economies are vulnerable to changes in nature, especially the weather. For this reason, traditional economies limit population growth. When the harvest or hunting is poor, people starve.

They are also vulnerable to market or command economies. These have superior resources that wage war and take away needed natural resources. For example, Russian oil development in Siberia has damaged streams and the tundra. That's reduced traditional fishing and reindeer herding. It's damaged the traditional economies in those areas. (Source: "7 Advantages and Disadvantages of a Traditional Economy," NavajoCodeTalkers.)

Examples

America had traditional economies before the immigration of Europeans beginning in 1492. Nomadic Native American economies were healthier than the agricultural-based ones. They didn't live in large communities. That protected them from smallpox and other imported diseases for a while. But poaching, war, and genocide destroyed them over time. The newcomers' market economy gave them weapons and a source of funding. The traditional economies couldn't compete. (Source: "Massive Population Drop Found for Native Americans," National Geographic, December 5, 2011. "Health of American Indians in Decline Before Columbus," Science.)

The United States had many aspects of a traditional economy before the Great Depression. In the beginning of the 20th century, 60% of the United States lived in farming communities. Agriculture employed at least 40% of the workforce. But they farmed poor land to meet demand following World War I. That led to the Dust Bowl once droughts hit. By 1930, only 21% of the workforce was in agriculture and generated just 7.7% of GDP.

Before the Civil War, the American South had somewhat of a traditional economy. It was based largely on farming. It relied on farming. It was also guided by a strong network of traditions and culture that were devastated by the War.  (Source: U.S. Dept. of Agriculture, The 20th Century Transformation of Agriculture)

Two-thirds of Haiti's population relies on subsistence farming for their livelihood. Their reliance on wood as a primary source of fuel has stripped the forests of trees. This makes them vulnerable to natural disasters, such as the earthquake that struck Haiti in 2010. Some economists also point to Haiti's tradition of voodoo as another reason for its poverty. (Source: CIA World Factbook, Haiti's Economy; Marginal Revolution, Why Is Haiti so Poor?)

Indigenous tribes in the Arctic, North America, and eastern Russia have a traditional economy. They rely on fishing and hunting of caribou for their existence. Others, such as the Saami, manage reindeer herds. A tribe member's relationship to managing the herd defines his or her economic role. That includes his or her legal status, culture and state policies toward the individual. (Source: Lee Huskey, University of Alaska at Anchorage, "The Changing Economies of Indigenous Communities," Module Six.)