Subsistence economy

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A subsistence economy is an economy in which a group generally obtains the necessities of life, but do not attempt to accumulate wealth. In such a system, a concept of wealth does not exist, and only minimal surpluses generally are created, therefore there is a reliance on renewal and reproduction within the natural environment. 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.

See also

• Subsistence farming

Appropriate Economic Systems in Asia, Africa & Latin America