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.