Command Vs Command Economy

Economic systems are the ways in which societies are organized to satisfy the needs and wants of people within them. With economies there are many conflicting ideologies; evidently the mixed economy and the command economy. There are a variety of ways to compare economies from the role of governments, economic growth, size of economy, employment and unemployment, quantity of life to environmental quality.

What is the main purpose of the economic system? The main purpose of the economic system is method used to produce and distribute goods and service. The three economic questions are: “What goods should be produced?” “How should these goods and services be produced” And “Who consumes these goods and services?” The characteristic of a market economics is that self-interest is the motivating force in the free market, self regulating market. The interaction of buyers and sellers motivated by self-interest and regulated by competition, all happen without a central plan. In a market economy, economic decisions are made by individuals and are based on exchange or trade. However, characteristics of a command economic

This type of economy works in the private sector of business ie. Individual firms. A command economy is an entirely different system in which a central government decides how to answer the three central economic questions. The government would decide what is to be produced, how it is to be priced etc.

The industrial expansion of the Soviet Union resulted in one of the greatest economic growths for a single country that the modern world has ever seen. This economic growth ultimately led to the USSR becoming one of the world’s only two superpowers in the post-WWII era. Much of the country’s economic growth occurred because of the USSR’s use of a command economy, which is “an economy in which production, investment, prices, and incomes are determined centrally by a government” [1]. Using a command economy, the USSR was able to force industrialization in certain sectors in which pre-Soviet Russia highly struggled. One of these sectors was the Nuclear Power sector. Ultimately, Soviet successes in the nuclear power industry were highly evident

The significant difference between is whether government intervention of economy exists. For command economy, the state has the right for all economy decisions, including planning and adjusting. Properties are owned by the government. The other extreme situation is the free-market economy, where the government do not place any intervention. However pure command economy as well as free-market economy do not exist in the world that is also agreed by Samuelson (2010).

The Soviet Economy has been termed a ‘command economy’. Do you feel this is an appropriate and adequate characterisation?

Then there is the Traditional economy, which they do things the way they have always been done. Another one is the Command

In a command economy, the government owns all aspects of the community. This means the government owns all factors of production, such as capital, land, labor, and entrepreneurship. Individuals do not own businesses; the government owns all major industries in the country. Individuals typically do not have a say in owning such resources as well. In a market economy, individuals own businesses and major corporations. The government typically does not have a say in owning businesses and cannot take over a business at their leisure.

Economic systems are organized way in which a state or nation allocates its resources and apportions goods and services in the national community. An economic system is slackly defined as country’s plan for its services, goods produced, and the exact way in which its economic plan is carried out. There are three types of economic systems exist, they are command economy, market economy, and mixed economy. Command economy is also sometimes called planned economy. The expectations of this type of economy is that all major decisions that related to the construction or production, distribution, commodity and service prices are all made by the government. However, in market economy, national and state governments play a

A command economy is well organized by government officials because they own and direct the factors of production, while market economies are not organized. Market economies are unplanned because they are determined by supply and demand of goods and services. Since government officials control the factors of production in the command economy it causes less unemployment, although there is no actual promotions and no one is praised for their work. There is more unemployment in the market economy because no one is equal, therefore everyone must do the best to provide for themselves and their families. Being successful in the market economy is about being able to be a good entrepreneur because the prices of items are determined by what sells and what does not sell.

In contrast, the economy within societies based on tradition lies on procedures designed in the past and maintained by shared customs and beliefs which are extremely powerful (Helibroner 8). For a society based on commands, there is always an imposed authority or an economic command. The economic problems are solved according to the commander’s decisions (Helibroner 10). This is the very first time in human beings’ history that economy is run by markets, making the transformation to market society appear to be unprecedented (Polanyi 43).

In a market economy, consumers decide what is produced, producers decide where and how to produce, and consumers decide who gets the products. Also, all productive resources are privately owned and operated. In a traditional economy all resources come from self labor and the government owns all resources. In a command economy, the government plans ways to allocate resources in key industries. Command economy’s government owns all basic resources and anything else is privately owned.

There are many major differences between a command economy and a market economy. To start out with, a command economy is planned, where the government decides the main economic decisions. Next, a market economy is when individuals are free to make their own decisions as they buy and sell products. So between both economies, the command economy is planned and the market economy is free. In conclusion a command economy and a market economy, are two completely different things.

For many nations, it is essential to choose a system of organization that successfully and thoroughly meets the needs of all the people. While some countries have supported the idea of communism and strong government intervention in the economy, others have limited the role and power of their governing body in the marketplace. For instance, in the United States, the government has a small role in the planning and monitoring of their economy. Individuals compete heavily against one another to receive the maximum profit for themselves in an sufficient manner. The former USSR, on the other hand, used large amounts of government control to restrict competition and control the output and distribution of the goods

In this essay I intend to look at and compare the main economic systems, which are: the command economy where all economic decisions are taken by the central authorities, the free market economy where all economic decisions are taken by individual households and firms, with no government intervention, and finally the mixed economy where economic decisions are made partly by the government and partly through the market. (Sloman & Garratt) I have chosen the issue of climate change as my example of market failure and will explore this later in my essay.