Two kinds of economies are the traditional economy and the market ECONOMY. The traditional economy exists IN societies where there is no trade. In this economy people do not HAVE money because they do not need it. THE market economy exists in societies where people buy and SELL goods. In the market economy, people need MONEY, so that they can buy products.
In the traditional economy, people rely on nature. THEY hunt and grow only the food they need. On the one hand, this THIS IS an advantage. These people have no reason TO fight because they do not own anything. This means they ARE peaceful. On the other hand, this is a disadvantage. These PEOPLE are poor. Furthermore, they cannot protect themselves against natural disasters because they have NO technology. This means they often die of hunger and disease.
In the market economy, SUPPLY and demand control what sells. This is an ADVANTAGE because producers have to provide customers with the guality and prices they want. However, PRODUCERS' need an incentive and this is profit. Firstly, producers compete with each other to sell their product and make a PROFIT. Secondly, producers use technology in order to spend less on labour. This can be a disadvantage because if people do NOT work they do not have money to spend on goods. Conseguently. the producer cannot MAKE a profit.
In my opinion, the best system is the market economy. Unfortunately, as the incentive is profit, governments set LIMITS in order to control the economy. This means a true MARKET economy cannot exist.
