Download Traditional Economy: Advantages & Disadvantages

Traditional
Economy/Command
Economy: Advantages &
Disadvantages
Advantages
• Production of goods for people’s
survival
Traditional economy is more of producing goods
along with essential services that would greatly help
for the survival of the people.
Advantages
• Knowing people’s role
In this particular economy, people can already
recognize what their role in the society or community
is.
Advantages
• Less destructive type of economy
Since traditional economy is more on the culture and
belief of the people, it will always sustain an
environment friendly surrounding that aims to give
the people their needs effectively and accordingly
without affecting the nature of the environment.
Advantages
• Strong and harmonious relationship
of the people
Traditional economy promotes cooperation and harmonious
relationship.
Disadvantages
• It is a vulnerable type of economy
Traditional economy is more prone to vulnerability due to the
continuous changes in the weather condition.
Disadvantages
• Capability to change
Since traditional economy is greatly based on customs and other
society’s beliefs, there would be a greater chance for this economy
to change as these aspects also changes.
Disadvantages
• Lower standards of wealth and living of the people
People in the traditional economy are not highly specialized in living
a wealthy life.
Command Economy: Advantages
• Adjusting the Production Rate and Availability of Completed
Goods
In command economy, it is possible to adjust the production rate
that meets the exact demands of the population.
Advantages
• Using Production in Controlling the Entire Course of the
Economy
The production may either be increased or decreased on specific
regions. This is better especially if the needs of the people arise that
further stabilize the economic situations of the people in the areas
Advantages
• Responding Easily on Emergency and Internal Disaster
As per the command and central authority, they can easily increase
the production in most facilities that are not affected by calamity or
disaster.
Disadvantage
• A Failure on Coordination
In command economy, planners try their best in coordinating their
economic decisions pertaining on investment, trade, production and
consumption of consumers and producers in the entire country.
Disadvantage
• Misplaced Incentives
Price and supply are regulated and monitored by the central
government, instead of the government planners and market forces.
They also decide on the services and goods to be produced and
distributed. Thus, this does not bring the rewards that a person
demands.