How does a traditional economy work?

The traditional economy operates based on customs and traditions that dictate economic activities, prioritizing producing goods and services for personal consumption and community needs rather than generating a surplus for trade (i.e., a self-sufficient economic system).

What is an example of a traditional economy?

In a traditional economy, for example, children who are raised on farms are likely to be farmers as adults. Rather than using money, they will exchange the goods they produce, like milk or leather, for goods they need, like eggs and vegetables for food.

Where did the traditional economy come from?

A good example of an early origin of the traditional economy comes from the Maasai tribe of East Africa. There, tribal leaders designed an economic model where decisions on labor, production, and the distribution of products and goods were based on tradition and community custom.