A Command Economy is an economic system in which the government controls the production and distribution of goods and services.
Command economies are often associated with communist countries but can also be found in other authoritarian regimes.
The government makes all economic decisions in a command economy and owns all businesses. This means that there is no private property or free markets. The government centrally plans the economy, and all production is directed towards achieving the goals set by the government.
Command economies have several advantages:
One is that they can be very effective at achieving specific goals. For example, if the government wants to increase the production of a particular good or service, it can direct resources towards that goal. Another advantage of command economies is that they can help to redistribute wealth from rich to poor. This can help to reduce inequality and improve the standard of living for the poorest members of society.
However, command economies also have some disadvantages:
One is that they can be very inefficient. Governments make all the decisions about what should be produced, leading to a lot of waste. Another disadvantage is that command economies can be very repressive. This is because the government has complete control over the economy and can use this power to suppress dissent and opposition.
There are two main economic systems today: command economy and market economy.
In a Market Economy, economic decisions are made by individuals and businesses in the private sector. Producers and consumers interact in markets to determine what gets produced and how it gets distributed. Prices send signals that ration scarce resources and incentivise businesses to produce goods that people want to buy.