natural economy

Also found in: Wikipedia.

natural economy

an economy in which money is either absent or very scarce, in which people produce for themselves with little or no trade within the economy or with other economies. A term which is now little used because of the problems with the word ‘natural’ and the question as to whether any such societies exist.

Natural Economy


the type of economy in which production is directed toward satisfaction of the producer’s own needs. “Under natural economy society consisted of a mass of homogeneous economic units . . . and each such unit engaged in all forms of economic activity, from the acquisition of various kinds of raw material to their final preparation for consumption” (V. I. Lenin, Poln. sobr. soch., 5th ed., vol. 3, pp. 21–22). The natural economy emerged in ancient times and became dominant during the historical stage in which the social division of labor, social exchange, and private property were still absent. In slaveholding society and under feudalism, the natural economy remained dominant despite the ongoing development of exchange and commodity-money relationships. K. Marx pointed out that the natural economy could prevail on the basis of any system of personal dependence, whether it be slavery or serfdom (K. Marx and F. Engels, Soch., 2nd ed., vol. 24, p. 544).

Production under the natural economy is typically closed, limited, tradition-bound, and dispersed, with routinized methods and a slow rate of development. As the social division of labor deepens, the natural economy is gradually replaced by commodity production. Yet under capitalism, certain features and vestiges of the natural economy are preserved at the level of peasant farming. In the transitional period from capitalism to socialism, the natural economy is one of the economic structures preserved in some countries. Among the socioeconomic structures that existed in Russia immediately after the October Revolution of 1917, V. I. Lenin mentioned “patriarchal, i.e., to a considerable extent natural, peasant farming” (Poln. sobr. soch., 5th ed., vol. 36, p. 296).

The natural economy lasted for a long time in economically backward regions of the globe, such as Asia, Africa, and Latin America, where clan-tribal or feudal relations predominated until European colonization. In the mid-20th century, 50–60 percent of the population of countries that have been freed from colonial dependence, especially those countries with “capitalist orientations,” is still employed in the existing natural or seminatural economy.


Marx, K. Kapital. K. Marx and F. Engels. Soch., 2nd ed., vols. 23–25.
Lenin, V. I. Razvitie kapitalizma ν Rossii. Poln. sobr. soch., 5th ed., vol. 3.
Problemy industrializatsii razvivaiushchikhsia stran. Moscow, 1971.


References in classic literature ?
But isolation probably acts more efficiently in checking the immigration of better adapted organisms, after any physical change, such as of climate or elevation of the land, &c.; and thus new places in the natural economy of the country are left open for the old inhabitants to struggle for, and become adapted to, through modifications in their structure and constitution.
“Full of grog,” interrupted the steward, his features settling down, with amazing flexibility, into their natural economy. “But, d’yesee, squire, I kept my hatches chose, and it’s but little water that ever gets into my scuttle-butt.
But it is the circumstance, that several of the islands possess their own species of the tortoise, mocking-thrush, finches, and numerous plants, these species having the same general habits, occupying analogous situations, and obviously filling the same place in the natural economy of this archipelago, that strikes me with wonder.
They, therefore, play an important role in the natural economy. However, many of the bats are killed en route as a result of collisions with wind turbines.
The development and progress of the autonomous region should be attributed to the concerted efforts by all peoples of Xinjiang I have been visiting my motherland since the founding of our new China in 1949 Xinjiang was based on natural economy comprised of different means of farming and animal husbandry.
The cost to cross the Severn Estuary has for far too long prevented people and businesses from integrating in a way that a natural economy would encourage, like we already see in north and mid Wales.
Besides providing timely irrigation supplies to agriculture, Mangla dam was constructed primarily as the backbone of the natural economy and a replacement for the depleted eastern river flows.
Many associate this to his natural economy of words and shy personality, while there can also be a case made for his time- engendered distance from today's generation.
With IPIC's Aa3/AA/AA credit ratings from Moodys, S&P and Fitch, highly experienced management, a quality asset base, and strategic role closely aligned to Abu Dhabi's natural economy, the IPIC transaction was extremely well received globally and generated an order book in excess of $12 billion equivalent, with approximately 350 investors placing orders, approximately half of which were making a new investment into IPIC bonds.
We are talking here about a trade whose first agents are represented only by the producer (either peasant or craftsman) and by the client itself, a primitive trade which removes the autarky's [12] danger from the core of natural economy.
By the 1940s, the dichotomy he had constituted between what he had called 'natural economy' and 'exchange' economy and between the outward looking town and the inward looking country had been blown to bits in European historiography.
We are bankrupting our natural economy. We need to fashion a rescue package before it is too late,'' he said.