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Traditional Economic System
This system is based on custom or tradition and characterized by the use of primitive capital goods, communalism
which bases the distribution of scarce goods on kinship ties, and the absence of technology and entrepreneurship.
Production is strictly for survival through the satisfaction of basic needs, and there is often no surplus or wastage.
Traditional economic system is common in rural settings in third world countries. An example is the economic system
of the Nigritos of the Philippines (O’Connor, 2006). Its advantages are the lack of wastage and high sustainability
while its disadvantages are the low volume of production and lack of a fair system of the distribution of resources.
Command Economic System
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