A traditional economy decides "for whom to produce" based on customs, traditions, and social roles inherited from past generations. The distribution of goods and services is usually determined by the community's long-standing practices, where family, clan, or tribal ties play a central role in allocating resources and products. Essentially, goods are distributed according to established social norms, obligations, and kinship networks rather than market demand or government planning.
How a Traditional Economy Decides For Whom to Produce
- The community's customs and traditions govern who receives goods.
- Extended family, clan, or tribe structures influence allocation.
- There is often little change over time, as production and distribution mirror ancestral patterns.
- Members of the community typically produce goods for their own use or for exchange within their social group.
This system tends to be agrarian and subsistence-based, with low productivity and limited market exchanges, focusing on meeting the needs of the community members according to historical and cultural precedents.
