Advantages and Disadvantages of a Subsistence Economy Based on Farming - Essay Example

Subsistence economy based on farming A subsistence economy is an economy, which can only produce enough to sustain and stabilize its economy without having a surplus to invest. Such economies are normally agricultural-based (Robbins, Paul, 198). This economy creates food that is adequate for the people and therefore there is no waste of food. They provide opportunities for exploitation by capitalists of resources since they have resources without technology to exploit them hence increase the GDP of a country.

The economy facilitates the spirit of hard work of its citizens since they have to work to provide for their families hence a working nation. Labor cost in such economies is affordable since everyone wants work. There are normally raised living standards of the citizens since the governments have excess to provide services to its citizens, there is also less corruption. In such economies, wants are mostly limited to food, shelter, and water, which are adequately satisfied since there is no room for luxury (Robbins, Paul, 243).

The disadvantage that has the most impact is that such economies are heavily reliant on rainfall without which such economies are not able to survive since drought drastically affects. There are high prospects of extreme starvation since production is normally not enough when the weather is poor. The quality of production is also not that high since crude forms of technology are still applicable; therefore, the food quality that is produced is lower than that which is in place today. Since the bulk of the economy is agriculturally based, the country does not benefit in terms of economic growth hence slow growth of the economy (Robbins, Paul, 251).