Traditional Economy

View FREE Lessons!

Definition of a Traditional Economy:

A traditional economy is an economic system that relies on cultural customs and ancestral traditions to determine what is produced, how it is produced, who produces it, and how it is distributed.

Detailed Explanation:

Imagine living in an economy where there are no stores.  If your family needs meat, someone hunts.  You would grow your grain and vegetables, make your own clothes, and build your own shelter.  Perhaps your neighbor returns from a very productive hunt. You trade some clothing for food. This kind of trade is barter or the exchange of two goods or services without the use of money.  Many cultures living in very isolated areas rely on bartering. These include the Australian Aborigines and Amazon tribes. These people live in traditional economies.  Traditional economic systems rely on cultural traditions to govern the production, distribution, and consumption of goods and services in a society.  In these societies, people primarily rely on bartering, farming, and hunting, and gathering. Their family ties are of critical importance to their place or "station" in life. Family and gender determine many facets of individuals' lives, including job, economic status, and social status. 

Dig Deeper With These Free Lessons:

Economic Systems
Economics – Managing Our Scarce Resources

Search the Glossary

Investment Calculator:

Market Overview:

Market quotes are powered by

Single Quote:

© Higher Rock Education and Learning, Inc. All rights reserved. No portion of this site may be copied or distributed by any means, including electronic distribution without the express written consent of Higher Rock Education and Learning, Inc.