Command Economy Essay

1139 Words3 Pages

Economics Analyzed
What to Produce? In a command economy, what to produce is normally determined by the central economic authority. In a true free market, what to produce is normally determined by personal choices. Conversely, a majority of nations fall somewhere between a true free market and a true command economy with production normally determined by a mixture of central planning and personal choices. As an example, the production of foodstuff 's is normally determined by supply and demand, while others like milk and sugar are normally subsidized by the government. All businesses must make a decision on what to produce when given limited resources. While a society has to decide how much food and shelter to produce in order to satisfy the …show more content…

There are two types of command economies; communism and socialism. Communism utilizes a state or other authorative group to plan and control the entire economy from the collective ownership of resources and labor. China, Cuba and the former Soviet Union are prime examples of communism. In a socialist system the government tries to create an environment which works toward the common good of all citizens. Individual choice and freedoms are given over to the collective of the country. A key difference between communism is the ability to make some choices or even vote on political …show more content…

Many variations exist, with some mixed economies being mainly free markets and the others being powerfully controlled by the government. These markets are more or less free of government ownership apart from a few main areas. These areas are not the resources that a command economy normally controls. Some examples are government programs like USPS, transportation, education etc. While all of these industries exist in the private sector, it is not always the case in a mixed economy as there can always be mixed results or suffer from downfalls commonly found in other economies. For instance, the last hundred years in America has seen an increase in governmental power gaining tight control over the economy through the imposition of laws and regulations while making businesses much less flexible. This is usually a general tendency of mixed

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