Command Economy

Leaders decide what should be produced and how it should be produced. They also decide who it should be produced for in part by setting wages. By them setting the wages, they decide who has the money to buy the available products.

A system in which the society's leaders make all economic decisions is called a centrally planned economy.

Examples of your economic system

North Korea

North Korea under communist control and there government controlled every economic decision. It diverted many of the country's resources to the military, building up an army of more than 1 million soldiers- there total population is about 22 million. It also developed a nuclear weapons program. During the late 1990s and early 2000s, food was so scarce that millions of North Koreans died from hunger and malnutrition. Many North Koreans survived only because of food aid from other countries, most notably South Korea.

What if in Washington, D.C., they had the power to decide which businesses could operate in your city. Further, these people had the power to decided not only what these businesses should produce, but also how much each business should produce each month. They could also decided who could have jobs and set work hours and pay scales for workers. government controls of this type are a feature of a command, or centrally planned, economy.

Socialism, an economic system in which the government owns some or all of the factors of production, developed from the ideas of Marx.

Communism, a more extreme form of social ism in which there is no private ownership of property and little or no political freedom, also grew out of Marx's thinking. Essentially, it is authoritarian socialism.

An authoritarian system requires absolute obedience to authority.

Advantages and disadvantages of your system

Advantages- Seek to provide for everyone, even the sick and the old who are no longer productive economically. Also, leaders in a command economy can use the nation's resources to produce items that may not make money in a market economy-certain medicines for example.

Disadvantages-Central planners often have little understanding of local condition. Because of this their economic decisions are frequently misguided or wrong. Also, workers often have little motive to improve their productivity, since they know they will be paid the same wages regardless of their output. And because there is no private property, there is no motivation for workers to use resources wisely. They face shortages and shortages often lead to creative behavior. Great suffering that people living under them endured. Carrying out centrally planned economic policies requires that individual rights.

An analysis of how your system addresses the three basic economic questions

What will be produced-What the Government decides is good for society

How will it be produced-Government mandated labor

For who-Society

Comment Stream

2 years ago
1

Your website is labeled clearly and you have the information necessary, however i would of appreciated more pictures and maybe some more examples.

2 years ago
0

I totally agree with @nmedi15 the information is clearly presented and easy to understand.