What Is the Difference Between a Traditional and Market Economy?

Traditional economy is a term of economics, also known as natural economy. In contrast to the commodity economy, it mostly appears in rural and agricultural societies. It is mainly based on social customs and practices to solve three basic economic problems (what is produced, how is it produced , To whom). The other three economic systems are the planned economy system, the market economy system, and the mixed economy system.

Traditional economy

It refers to the use of a one-way linear open process of "resource-product-pollution emissions" when dealing with the relationship between humans and the environment. With this model, with the development of industry, the scale of production and

Difference between traditional economy and circular economy

After the 1990s, the development of the knowledge economy and circular economy have become two major trends in the international community. China has introduced the idea of circular economy since the 1990s. Since then, the theoretical research and practice of circular economy have been continuously deepened. The concept of circular economy has become a consensus of people to a certain extent. The discussion of the differences between circular economy and traditional economic models will help people to clarify their development ideas. ^[2]

In terms of the relationship between humans and the environment, human society has experienced three models in the economic process: the traditional economic model, the "end-of-production governance" model, and the circular economy model. ^[2]

Difference between traditional economy and new economy

After the 1990s, the U.S. economy experienced a sustained high rate of growth that was rare after World War II, and a similar phenomenon appeared in Europe and other economies in the world, known as the new economic phenomenon. The essence of the new economy is information and globalization. The core of the new economy is high-tech innovation and a series of innovations in other areas. The reality of the new economy is global economic integration. ^[3]

There are three main characteristics of the new economy. First, companies are increasingly focusing on shifting value from tangible assets to intangible assets. Second, the value shifts from the company that provides the product to the company that provides not only the product but also a low-cost and highly personalized product, or a company that can provide a solution to the problem. Finally, enterprises can easily reduce costs through data management, which is another important feature of the new economy. Internet marketing has become an important content of the new economy. ^[3]

The traditional economy, which is based on manufacturing, is characterized by standardization, scale, modelling, efficiency and hierarchy, while the new economy is based on information technology, and pursues differentiation and personality. , Networking and speed. The new economy requires companies to have standards for customer satisfaction and customer retention, while at the same time being able to fulfill their promises to customers. ^[3]