subsistence economy

A subsistence economy is an economy in which a group obtains the necessities of life through self-provisioning. In such a system wealth is not measured in any form of currency, but rather exists in the form of natural resources. Food in a substinence economy is grown or hunted, and homes built from local materials such as wood, sod, snow or clay. Only very short surpluses generally exist, and therefore there is a reliance on renewal and reproduction within the natural environment to ensure survival. For this reason subsistence economies are often lauded by environmentalists who consider market systems too much of a strain on the environment. Before the invention of currency, subsistence economies were the dominant economic system throughout the world. The system still survives as the primary traditional practice in several societies, including the Melanesian people of Papua New Guinea and the Solomon Islands. It was also the primary practice in French Polynesia until French military personnel were stationed there in 1962, after which time there was a shift to a tourism-based system.

Subsistence Economy

See also