Transitions from Traditional to Modern Economies

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)

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...