Command Economy

What is a Command Economy

government creates an economic plan for all regions of the country. It starts with a plan to set the economic goals. This breaks it down into short term plans to view the goals. The goal of the plan is to generate economic growth and to increase production and resources. The government is a monopoly business in which industries are most important to the economy. There is no competition in these industries.

Command Economy pros and cons

Pros- great at mobilizing economic resources quickly. They can create industrial power and imperative social goals. They are able to take over individual self interest and to achieve a greater goal for the society at large.

Cons-This mobilization means command economies take other societal needs. Workers are often told what jobs they must do. However people will not ignore their own needs. They develop a shadow economy or black market to buy and sell the things the economy isn't producing. Command economies often produce too much of one and not enough of another. Prices are set by a central plan so it can't be used to measure demand.

Some of command economy leaders