Assignment Title: Write a note on Transitions from traditional to modern economies. Justify your arguments with authenticated references.
Assignment Brief
In this essay I have covered the basic concepts of traditional and modern economies and why transitions should be made from the traditional economy to the modern economy.
It includes the role of energy in driving the economy along with the energy transitions in history that had an effect on the economic system.
ESSAY
By economy we mean the way people produce, the way people trade and the way that they use goods and other services. energy economy deals with the supply and use of energy in different societies. To understand the transitions we should first have understanding about the traditional and modern economies. The economic theory with time has changed and evolved with respect to the kind of models in use and the factors that play key roles.
A traditional economic system bases upon the direct trade done with the members of the community and it resists any change. It bases upon the customs and the beliefs that people pass on from one generation to the other. It produces goods and services that are required for survival. Disadvantage of the system is that this system resists change because people think that what is passed onto them by their ancestors is correct and they also resist the use of technologies hence the productivity is low. It is an underdeveloped economy in which the people use primitive ways for harvesting agriculture. This type of economy has very little growth. Traditional economy is found in the third world countries. (1-modern economic Theory and Development Karla Hoff Joseph E. Stiglitz)
The Essay on Traditional Societies Life People Modern
The old-traditional way of life has vanished for ever. Today only villages and some small towns remind us of this kind of life, and as time passes, more people choose to abandon traditional way of life, to move to the "big city." Modern way of life has nothing in common with the traditional one. Human habits, values, norms have changed. The most important of these social changes can be observed in ...
One reason because of why transitions are made from traditional to modern energy economy is because of the production rate difference that is much more in the modern economic system.
Modern economy also called as learning economy or knowledge based economy is based upon the access to and use of knowledge in all the economic and socio economic activities. Modern economy in many parts of the world has resulted in huge declines in computation costs and an increase in the computation speed. Over the time good quality, cheaper and faster information is available for the people.
Energy transitions take a lot of time, it takes up to decades for this diffusion. Transition from the traditional energy economy to the modern one resulted in a high boost of the economic system. Shifting from wood to coal was the basis for the industrial revolution. England did this in the sixteenth century. Second big energy transition took place in the United States and it was the use of oil (kerosene oil) for illumination purpose. With the passage of time electric light displaced the oil lanterns in the US but oil’s share in the market was secured when automobiles were introduced.
Graph taken from (2-Energy Transitions: A curious history, Richard Rhodes)
The graph shows the energy transitions of the world with the passage of time. In the start only wood and coal used to drive the energy sector but with the passage of time the usage of oil and gas took over and now oil and gas are the main drivers of the energy sector with nuclear energy slowly progressing to be one.
Now even in the twenty first century there are billions of people in the world whose basic energy needs are not being fulfilled. Access to electricity and gas still remain a barrier in the third world countries.
The Term Paper on Saudi Aramco-Saudi Arabian American Oil Co
May, 2013 This dramatic shift had historical and political circumstances with changed economic conditions. The paper shows the company: history, strategy and projects internally and internationally. It also shows us the innovation key role played in the global organizations growth and Leadership role. Introduction “Saudi Aramco-Saudi Arabian American Oil Co” that was established in (1933) ranked ...
The key factors that describe the relationship between the traditional and modern economies are; Modern economy creates new needs by introducing new products for e.g. auto-pilot for automobiles; a system that is satellite based. It forms new markets for e.g. special tools are made for the left hand individuals for their convenience. The countries that have replaced their traditional economies with the modern ones have observed a large reduction in the transaction costs because of cheaper, better and faster information. (3-New and Traditional Economies Lawrence J. Lau)
Japan is a prime example of this that has strived for modern economic growth since the tokugawa period which is now seen as the feudal development stage of Japan. The growth to the modern economy started in the Meiji period that led to the growth of the country. During the early Meiji period the agricultural sector of Japan failed to have any government assistance but with time this sector led to the economic and industrial development of Japan. Meiji farmers started to innovate and took it upon themselves to have a better lifestyle. They purchased modern machinery, started exchanging information, seeds and started to hold lectures on the ways required to improve efficiency. All these efforts led to the increase in production. Meiji farmers started making handsome money by agricultural exports. This led to increased capital which meant higher incomes for the rural class as well and the standards of living improved greatly.(4-The Tokugawa Period and Japan’s Preparation for Modern Economic Growth Sydney Crawcour Journal of Japanese Studies Vol. 1, No. Autumn, 1974)
The last 20 years have been the years of economic transition for China. Modern economy resulted in an increase in 9.3 % in the GDP of the country from 1978 to 2000. The commodity charges were reduced to a minimum and the income of people living in the rural areas increased. In 1992 China shifted to a market oriented economy due to which the government priced commodities were reduced from 737 to just 89 but even after keeping all this in mind one cannot deny the fact that due to this transition to modern economy China has also suffered, suffered in a sense that China at the moment is the largest carbon dioxide emitter in the world, surpassing the United States. It is due to the rapid growth of industry in the country. 80 % of the power in China is produced from dirty coal. Now China is taking steps to make transition towards an energy clean energy economy. (5-Understanding Economic Development in Modern China C. H. Tzeng)
The Research paper on Economy Of China Vs Economy Of Mexico
Nations that form BRIC bloc are those nations that are demonstrating potential to become developed countries. So is the case with the MINT bloc. These blocs constitute nations that have almost similar economic potentials. The blocs are created in economies to make it easier to analyze the economy of individual nations relative to other nations that have the same potential. It also generalizes ...
In the end conclusion can be derived that transition from the traditional to modern economy results in; Expanding the foreign trade sector, rise in the government budget relative to national income, rise in literacy and other forms of education spread throughout the population, expand in the consumer choice, improvement in the standard of living of the people.
Word Count: 938 (Excluding the references)
LIST OF REFRENCES
1-Modern Economic Theory and Development Karla Hoff Joseph E. Stiglitz
2- Energy Transitions: A curious history, Richard Rhodes
3-New and Traditional Economies Lawrence J. Lau
4-The Tokugawa Period and Japan’s Preparation for Modern Economic Growth Sydney Crawcour Journal of Japanese Studies Vol. 1, No. Autumn, 1974
5- Understanding Economic Development in Modern China C. H. Tzeng
