A natural economy is based on exchanging resources rather than financial money, with items valued based on usefulness. In contrast, a financial economy focuses on profit and trading resources for money. Barter is the main form of trade in a natural economy, with resources harvested based on need rather than profit. This leads to a more sustainable use of resources.
A natural economy is an economic system directly opposed to financial money, or money that focuses on finance, money, profit, and trade. Instead of paying for items, citizens exchange resources. Some forms of this economy set items to a certain value for fair exchange, but this is not necessarily inherent in the system. Resources such as trees and water are harvested for direct consumption rather than to earn money. This means that a natural economy is based more on what nature can produce rather than how much must be harvested to make a profit.
A financial economy describes the economics adopted and used by most of the world. This economy focuses on using and obtaining money, as well as trading and harvesting resources for profit. In this system, companies use resources based on how much is needed to make a profit. All items also have a value, unlike in a natural economy where value is based on the usefulness of the item rather than arbitrary factors. Another term for a financial economy is “artificial economy, because this economic system has more to do with arbitrary values and profits than with nature.
Barter is the main form of trade in a natural economy. In some systems, exchange is not used and the group of people in the economy allocates resources based on need. Money does not participate in this economy, but some systems set a value for items based on the item’s usefulness. This value system is created so that the exchange is fair between all parties involved.
Resources are needed for any economic system to survive. A financial economy consists of raising funds based on profit. In a natural economy, profit is not part of the economy, so nature determines how much resources are harvested. This means that far fewer resources are harvested.
For example, a field grows at a rate of 5% per year. A farmer in a financial economy knows that he must harvest at least 8% of a particular field to make an adequate profit, even if that is more than what is grown. The natural economy can only harvest 5% of the field – to meet the immediate needs of the economy. This is because resources harvested in a natural economy are based on need, not profit.
Consumption in a natural economy, as opposed to a financial economy, is not done in excess. Instead, resources are taken as needed; otherwise, the resources are not harvested and remain in the wild. This type of economy is more sustainable and ensures that resources are not exploited to exhaustion.
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