what is a command economy?

 

what is a command economy?

What is a command economy?

A command economy is an economic system in which the central government or a central authority has significant control over the production, distribution, and allocation of resources. In a command economy, the government typically determines what goods and services should be produced, how they should be produced, and how they should be distributed.

In a command economy, the government sets production targets and directs resources to meet those targets. It makes decisions regarding what industries to prioritize, how much should be produced, and at what price goods and services should be sold. The government also often owns and controls major industries, infrastructure, and resources.

Command economies are characterized by centralized planning, with the government making decisions based on its assessment of societal needs and priorities. Prices are often set by the government rather than determined by market forces. The government may also control wages, employment, and investment decisions.

Command economies have been associated with centrally planned socialist or communist systems, where the goal is to create an egalitarian society with a focus on meeting collective needs rather than individual wants. However, it's worth noting that command economies can vary in their level of centralization and government control.

Command economies have been implemented in various countries throughout history, with mixed results. While they can provide a high degree of stability and control, they are often criticized for their inefficiency, lack of innovation, and the potential for abuse of power. Many countries that previously had command economies have transitioned toward more market-oriented systems in recent decades.