Command Economy
“Command economy” (also called a planned economy) is an economic system where the government makes the key decisions about what to produce, how to produce it, and who gets it.
Instead of supply and demand driving the market (like in capitalism), a central authority controls things like:
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Prices
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Production levels
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Distribution of goods
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Wages and resource allocation
Key features
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Central planning: Government sets economic goals and plans output
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State ownership: Industries are often owned by the government
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Limited consumer choice: Fewer options compared to market economies
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Fixed prices: Prices are usually set by the state, not the market
Examples
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Historically: Soviet Union
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Today (partially): North Korea, Cuba
Pros
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Can quickly mobilize resources (e.g., during war)
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Less income inequality (in theory)
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Focus on basic needs like healthcare and housing
Cons
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Inefficiency (hard to plan everything correctly)
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Shortages or surpluses of goods
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Less innovation and motivation
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Limited personal freedom in economic choices