Traditional economy: Innovations, efficiency and globalization

Abstract

North Caucasus is a diverse region at the border of Europe and Asia that belongs simultaneously to the modern civilization and historical traditions, and is populated with numerous multi-language, multiconfessional nationalities that speak a variety of languages and follow diverse traditions, carefully guarding their distinctiveness. Our paper sets up a goal of studying the processes and the mechanisms of modernizing regional economy on the case study of this unique region. The paper confronts the typical view about the similarity and differences of traditional economies supported by different economic research schools and opens opportunities for scientific (dialectical) analysis of a mechanism, non-customary in the modern society, of modernizing traditional economies inevitably present in the “pore spaces” of the global economy. We substantiate a special methodology for studying traditional economies, characterizing their essence, showing the methodological difficulties of analyzing traditional economies, exposing the specifics of their system-wide organization, studying the non-economic sphere in a traditional economy, and describing the mechanism of modernizing a traditional economy.