Command Economies

Caleb Dobias

A command economy, quite simply, is an economy where the government controls almost all aspects of trade.  They determine what to produce, how to produce it, and who to produce it for.  Individuals and businesses don't have nearly as much freedom as in a mixed or market economy, but it should be noted that it is extremely difficult to have a perfect command economy.  Because there is a massive amount of things one can produce, it is hard to control every single piece of production.  Also, for a command economy to participate in an increasingly interconnected world, it cannot retain a perfect command of resources.


Even though complete of the control comes with some difficulties, there are several advantages in being in a command economy.

  •   In most cases, everyone will at least have some share of wealth to live off of, so there is a more proportionate distribution of wealth.
  • Individual welfare is taken into account, usually, so the general population can at least be taken care of a bit.
  • Since the government holds a monopoly, they can command huge industries and thus create massive amounts of product to export
  • Massive projects can be undertaken, akin to the Great Pyramid of Giza.


Obviously, a command economy isn't perfect and it comes with numerous disadvantages as well.

  •   Individual freedom is not taken into account, so you do not have the capability of building a business.
  • If the government becomes corrupt, the hard working citizens pay for it.
  • Innovation and expansion is decreased because it is all run by one authority.
  • Competition is usually non-existent, so prices are controlled by the government.

The video ahead breaks down the command economy further along with its advantages and disadvantages.


Which one of these choices does not represent a command economy?


Comment Stream

3 years ago

Very well worded, explains clearly what it needs to. I would have broken down the first paragraph into a couple different paragraphs, it has multiple different ideas clumped inside of one paragraph -Tim Shiflett

3 years ago

Wow, very nice website, I like how you used a slideshow to depict the different countries with command economies. I also think the quiz part was really neat and cool. - Timothy Yu