What is Subsistence Economics?

The Subsistence economy Is an economic system where everything that is produced is consumed by the producers themselves.

This type of economic society, known as a self-consumption society, is closed to exchange. That is to say that the members of the same, use the resources with which they count, for the production of all that they need to subsist.

Farmer as a pillar of the subsistence economy

This economic system is characteristic of the preindustrial society, where the resources used for survival were based mainly on agriculture.

The subsistence economy is one where individuals belonging to society decide to use their own resources in order to meet their needs.

As these resources are limited, everything that is produced is consumed by the population, not leaving enough surpluses for them to be commercialized.

The subsistence economy varies from culture to culture. The common denominator between them, is that to subsist realize and combine different types of activities. Productive ones, such as agriculture and animal husbandry; Extractive activities, such as hunting, fishing, fruit harvesting; Manufactures; And handicrafts, among others.

The surpluses extracted from the different production activities are exchanged with other communities through the barter system or are limited to local trade.

How should the subsistence economy be understood?

The subsistence economy must be understood as a system where it is the society that produces what it needs to live, acquiring the products resulting from that production, to satisfy its needs.

This is also termed the term of self-consumerism, or self-consumption, which is characteristic of underdeveloped economies. It reached its maximum potential in small communities called subsistence societies.

Subsistence economy, or self-consumption, mainly refers to the fact that what is produced, whether a food, an element or a service, is consumed or used by the producer himself. Of particular importance is the agricultural production, where self-consumption becomes more relevant.

In this economic system, what is produced for subsistence itself is used. There are no commercial transactions of any kind.

So the economy of subsistence or self-consumption can be understood as the ability of society to meet its own needs.

Among the activities carried out in the subsistence economy are agriculture, hunting and fishing. Also, the collection of forest elements and the manufacture of handicrafts.

To carry out these various activities, the family is understood as a unit of production, which generally works independently of the others.

Within the families there is a division of labor according to the ages and sexes of the members of the same. In addition, for the distribution of roles, the capacity for cooperation in terms of age is taken into account.

Also the roles for the work are differentiated between men and women. These were dedicated to the hunting and the fishing, whereas they to the housework and harvesting of fruits of the forest.

What is Subsistence Economics?

The subsistence economy has been relegated in most of the developed world. However it can be found in some very specific sectors, such as in farms or family enterprises.

As society evolves, technologies develop, and the market becomes more complex, the self-consumption system is weakening.

The product exchanges began to be put into action, the community indicating what they need or want to another, which has more resources.

But in this exchange, some inconveniences began to emerge. Among them, many times who had the element to exchange, did not need the product that the other had to offer. In this way it began to produce more and more to be exchanged for silver and gold. And with it, you can buy another product.

The subsistence economy of the past had as objective to produce to satisfy the proper needs of food and clothing with the fruit of the produced thing. In this way, what was produced for personal consumption.

This was currently dominated by marketing, which has become a priority objective. For through it can be changed what produced by money, and with it meet the economic needs.

Advantages and disadvantages

The subsistence economy has prevailed throughout the years that comprised the pre-industrial era. At that time it has been the way of life and subsistence of whole societies. However, this economic system has several advantages and disadvantages.


Among the latter, the main one is that a subsistence economy, like any system, can fail. If this happens, it is impossible to acquire the necessary resources for life, so that the needs of the constituent population of society could not be met.

Another important disadvantage lies in the fact that to satisfy the needs of the population, it is entirely dependent on nature. Having no control over this, climatic factors, droughts floods, among other imponderables, put in risk the ability to self-sustain.

At the same time, the subsistence economy is absolutely dependent on the people who make up the society immersed in it.

The possibility that individuals have to become ill, physically limited to work, or even to die, is another disadvantage. With a reduction of producers, there is less work, and consequently fewer resources.

The product is used to satisfy the needs of the members of society, who at the same time are the producers themselves. This saves the cost of distribution that should be paid if the products are sold.

But at the same time, the society is subject or limited to always consume the same products, having for it a little varied food and of inferior quality with respect to those who live in the cities.

In turn, consumption becomes forced. Since those who have not been able to exchange their products for the necessary, they are forced to consume them in order not to lose them.

Another drawback of subsistence economy lies in the difficulty of calculating prices. It is practically impossible to assess the total consumption at the place where the production took place.


Among the advantages of subsistence economy, one can emphasize its self-sufficiency. It works by sustaining the survival of the community, according to what it can extract from nature.

Thanks to hunting and agriculture, another advantage of this economic system lies in the fact that the population can feed without the need of structures or industries, being able to choose from the environment what they want to hunt and collect.

Another advantage is that by living in nature, people learn to adapt to seasonal resources.

By means of agriculture, the advantages of the subsistence economy were enhanced, since it is more reliable, more convenient and simpler than hunting and harvesting.

The reduction of the rural population and the inequalities between the countryside and the city are the main reasons why self-consumption is in recessive process throughout the world.

Other influential factors are the continued development of the economy, the mechanization of agriculture, the advancement of technologies, among others. As a consequence of this, the market system is expanding and the subsistence economy is in recess.

Types of self-consumption societies

Economics must be understood as a social science whose study focuses on society and the way its members relate to it.

It is necessary to understand that different societies have fought throughout history for and for their survival, choosing the forms they considered most beneficial to use the resources with which they counted, not being of an unlimited nature.

This allows to typify or classify the different societies of self-consumption or subsistence economies.

It is from the capacities of individuals and the development of the various forms of production that societies have been using their own resources to source themselves. In this way they were sufficiently capable of attending to their own needs.

In self-consumption societies, scarcity of resources and economic problems do not present a drawback. For in these societies, what is indispensable for the survival and satisfaction of one's needs is produced or elaborated.

They are closed societies to the exchange, reason why the capacities and own resources are what facilitate the self-sufficiency. And they allow the owner the possibility of disposing of them or giving them to other individuals belonging to society.


This self-consumption society is based on a simple economy, which seeks to meet the essential needs of the members of the community.

Its development transcends generations and is mainly based on family relationships, where work roles are distributed, with the woman being responsible for household chores and the man who is dedicated to fieldwork and military service.

This self-consumption society is also known as barter system or direct exchange of goods.

In this system the production is executed for the own consumption or, to realize exchanges of products, always with the objective of satisfying the basic necessities.

As the main consequence of colonization, economic dependence arose. For instead of producing for themselves, the producers had to do it for others at very low prices, being subject to an unequal trade.


What is Subsistence Economics?  1

Feudalism reached its peak in the twelfth and fourteenth centuries. Within the self-consumption societies of the time, there were varied social organizations with different economic characteristics.

Among the different social classes, at the top is the monarchy, being the one of maximum authority, counting on economic privileges.

In the next social class are the feudal lords with a high power of independence, possessors of the same privileges that the monarchical class, being owners of great extensions of territories.

And in the third social class are the artisans and serfs who were subjected and forced to maintain a production relationship under those characteristics. Where the economy was strictly regulated. The use of the lands was granted by the feudal lords, who provided military protection to the lower class, who worked them.

What is the subsistence crisis?

The subsistence crisis refers to the period of food shortages. This can be a consequence of bad weather, which affects the production of them; The result of bad harvests, among other factors.

As a result of scarce production, famines occur, which in turn have devastating effects: malnutrition, diseases of different kinds, social unrest and even a high mortality rate.

Subsistence crises are typical of the pre-industrial period where there was a predominance of agriculture and livestock in the production system for survival.

The crisis of this economic system can be explained by the conjunction of the population increase, in an environment of limited resources, plus the reduction of yields of production.


  1. Burt Tolerton, J.R. (s.f.). Social organization, land tenure and subsistence economy of Lukunor, Nomoi Islands. Pacific Science Board, National Research Council.
  2. Carl K. Eicher, L. W. (1964). Agriculture in economic development. McGraw-Hill.
  3. Gudeman, S. (2013). The Demise of Rural Economy: From Subsistence to Capitalism in a Latin American Village.
  4. Luther, H. U. (1983). Socialism in a Subsistence Economy, The Laotian Way: An Analysis of Development Patterns in Laos After 1975. Chulalongkorn University, Social Research Institute.
  5. Mary Pohl, P.R. (1985). Prehistoric lowland Maya environment and subsistence economy. Peabody Museum of Archeology and Ethnology, Harvard University.
  6. Problems and Prospects of Horticulture in a Subsistence Economy: Wadi Kutum (Sudan). (1984).
  7. Wharton, C. R. (1970). Subsistence Agriculture and Economic Development. Transaction Publishers.
  8. What Is A Subsistence Economy? (S.f.). Obtained from Worldatlas.

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