Traditional economy
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A traditional economy is an economic system in which resources are allocated by inheritance, and which has a strong social network and is based on primitive methods and tools. It is strongly connected to subsistence farming, as well as herding cattle and hunting and gathering. Members of a traditional economy often make their own clothing and tools. If they produce more food than they need, they trade the surplus for goods made by others.
Most countries that have historically had a traditional economy have replaced it with a command economy, market economy, or mixed economy. However, it is still found today in underdeveloped, agricultural parts of South America, Asia, and Africa.
[edit] Disadvantages
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A traditional economy does not allow for much economic growth and development as changes are very slow and little social mobility. A traditional economy does not take advantage of technology and there is relatively little promotion of intellectual and scientific development. A traditional economy provides few incentives for entrepreneurs, thus limiting choices for consumers and lowering standards of living.
