Traditional Economy/Command Economy: Advantages & Disadvantages

Advantages Production of goods for people’s survivalProduction 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 roleKnowing 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 economyLess 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 peopleStrong 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.