Natural economy

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Natural economy is a type of economy in which money is not used in the transfer of resources among people. It is a system of allocating resources through direct

subsistence). As such, natural economies tend to be self-contained, where all the goods consumed are produced domestically.[1]

The term has often been used in opposition to other forms of economy, most notably capitalism.[1] Rosa Luxemburg believed that the destruction of the natural economy was a necessary condition for the development of capitalism.[2] Karl Marx described the Inca Empire as a natural economy because it was both isolated and based around exchange rather than profit.[3]

Other writers have used a more relative sense of natural economy. Belgian economic historian Henri Pirenne noted that medieval Europe has often been described as a natural economy despite the existence of money, since money played a much less significant role than in earlier or later periods.[4]

See also

References

  1. ^ .
  2. ^ Luxemburg, Rosa (1951). The Accumulation of Capital. London: Routledge & Kegan Paul. p. 369.
  3. ^ Marx, Karl (1956). Capital, volume 2. Moscow: Progress Publishers. p. 67.
  4. ^ Pirenne, Henri (1936). Economic and Social History of Medieval Europe. London: Routledge & Kegan Paul. pp. 103–104.