Subsistence economy
Zeeshan Wasim
The concept of subsistence economy is one that was in practice in many parts all over the world. However, with the passage of time and the development of industrialization on global level, the subsistence economy can perhaps be considered as anomaly or a rarity. The core characteristic of this economy is its lack of technology, profit and the lack of industry. Instead of a proper business eco-system and environment, a subsistence economy depends on barter practices and low-scale trading for survival.
Before global business practices and systems were developed that paved the way for industrialization, years ago, subsistence economy was the leading approach to market management. However, after all the technological advancements and the innovative alterations that got introduced in every geographic location where a sustainable living structure persists.
In a subsistence economy, economic activity does not have a monetary aspect. As opposed to the current market structures, wealth in this economy is determined by the ability of a family to be able to provide for themselves. Hence, the key requirement for this economy is natural resources. Gathering, food cultivation and fishing are some of the major activities that are the essence of subsistence economy.
For the sake of clarity and better understanding, the difference between subsistence economy and the economic system that is prevalent all over the world today, we can say that the goal of a subsistence economy is to maintain existence as compared to the contemporary economies in which the purpose is to create a surplus for growth and investment.
Historically, all the humans were part of a subsistence economy. Then urbanization was introduced which changed the underlying principles on which the communities operated. As the civilizations expanded and developed, values were placed on goods and services and societies started to evolve into unique types of economies with distinct features.
Though it may seem ineffective, there actually are benefits for people within a subsistence economy. First off, in such economies, people are born into their roles within the society. The child of a fisherman will grow up to become a fisherman as well. The advantage of such a system is that people are more understanding and easily accept their production roles within the overall eco-system. Proper understanding of their roles and a lack of focus on generating a surplus lead to a marketplace that is not competitive. Hence, the level of satisfaction and happiness of people in a subsistence economy will most probably be greater than that of the people working in contemporary marketplaces in which competition is growing at a rapid pace and all individuals are worried about becoming redundant.
Another benefit of the subsistence economy is that the economic decisions are not made on an individual or in a linear manner but rather they are made by the entire society or community as a whole. Therefore, nobody in such an economic system ever feels that they are not competent enough to have a say in the future economic plans.
Most important of all, the subsistence economies are less environmentally destructive as compared to economies that are based on the concept of industrialization. This is because economic activities in subsistence structure are traditional in nature and they do not rely on any fuels or chemicals like the industrial economies that might contribute towards environmental destruction.
Though the subsistence economy is now a rarity, we can conclude that such a structure would keep people satisfied and mentally at peace, given the lack of competition and a lack of focus on the creation of as much surplus as possible. Maintenance is the goal of subsistence economy and it had always kept people well-connected to each other within the communities. Today, however, the landscape has been altered.
The writer is a digital marketer, entrepreneur, columnist, freelance content writer and a graduate of the Institute of Management Sciences (IMSciences), Peshawar in business administration. He can be contacted at: srkgothambat@gmail.com. He also tweets @ZeeshanWasim8.
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