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What Is a Non-Market Economy?

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  • Written By: G. Wiesen
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  • Last Modified Date: 31 August 2014
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A non-market economy typically exists in an environment in which goods and services are bartered and households produce much of what they need to survive. This means that a market system, in which money is exchanged for goods and services, is virtually unnecessary in such an economy. These types of economies can be seen in a number of different countries and parts of the world in which people acquire food and other necessary goods through hunting and foraging. A non-market economy may be seen as “primitive,” but it has a number of advantages that market economies often lack.

The categorization of a non-market economy is largely based on the difference between many modern economic systems and those of past cultures in which money was impractical and unnecessary. There are a number of modern countries and regions in which people continue to develop and exist in a non-market economy, though these have decreased in number. Prolonged exposure to a market economy is often detrimental to the non-market one, and ultimately results in the establishment of a new market economy. As a result, non-market economies often thrive in isolation and may be protected from influences from other countries by various organizations.

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A non-market economy typically functions through a combination of self-sufficiency for many households and bartering for goods and services. Food, water, shelter and other necessities often come from within each household individually, through hunting, fishing, foraging, and similar activities. Any household in a non-market economy with excess amounts of goods typically shares with other households due to societal pressure. Prestige in this type of economy is often earned through sharing, cooperation, and excelling at performance of different tasks.

In contrast, a market economy usually places prestige on the acquisition of money. Non-market systems lack money, and people in such economies work to produce or acquire what they need rather than exchanging time and skill for financial gain. This tends to naturally place emphasis within a non-market economy on the quality of work performed and the importance of time spent at a task with family and friends.

The foundation of a non-market economy is typically small social groups and the interactions between family members and friends. Someone in such an economy goes to gather food or fish not to make money, but for the necessities required to continue to survive. Almost nothing is required in this type of economy from outside the local social structure, and so families and groups can be quite insular and protective of each other. Many modern social values in numerous countries are extensions of previous ages in which such economies were prevalent, though changes in economic structures have changed the way in which cultures behave.

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turquoise
Post 3

There are disadvantages an disadvantages to every system. I don't think we can say that one type of market is superior to another. It depends on what that society values.

fify
Post 2

@fBoyle-- But in that kind of system, you won't have many options. You will be eating the same things all year. Whereas in a market economy, you have access to many different kinds of goods, even from the other side of the world. I think that this is an advantage that we take for granted.

I don't think that there will be much development and advancement in a non-market economy either. Since no one will feel the need for it, technology will stay the same.

fBoyle
Post 1

I wish I lived in a social structure with a non-market economy. I feel that in a market economy, life is made exceedingly difficult. We all work to feed ourselves and our families, but there are so many barriers in place. We first have to go to school, then work to make money and then spend that money to buy food. We can do this much more easily by planting and harvesting crops and building our own home.

Life in a market economy is also very individualistic. Everyone spends their own money and if someone can't find a job, he can't survive. In a non-market economy, if someone isn't able to grow food for some reason, family members and friends will support him.

Isn't this a much better system?

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