A traditional or patriarchal economy is an economic system in which traditions and customs determine the practice of using limited resources. It is the oldest type of economy. In a traditional economy, land and capital are in common possession, and the main economic problems of society - what, how, and for whom to produce - are solved mainly on the basis of traditional tribal or semi-feudal hierarchical relations between people. The traditional economy is based on backward technology, the dominance of manual labor, and agricultural production.
This type of system is characteristic of third world countries. It continues to persist in the agricultural zones of America, Asia, and Africa. It implies natural-community forms of activity, which are based on collective farming.
Federalism gives both state and national governments the power to make laws, although it should be noted that in a federal system the federal laws reign supreme.
