Command Economy

An economy where supply and price are regulated by the government rather than
market forces. Government planners decide which goods and services are produced
and how they are distributed. The former Soviet Union was an example of a
command economy.

Countries

Cuba
Saudi Arabia
Iran
North Korea
China before the 1980s
India before the 1990s

Comparing Command
Economy With Other Type of
Economy

Traditional
Economy

Command
Economy

Economy
Market
Economy

Mixed
Economy

Pro and Cons of

Command
Economy
PAMORNPOL, BARAME, THANAPAT

PROS

1. Better Mobilization of
Resources
Making sure that progress is fast is one of the
goals of a command economy that pays off.

2. No Monopoly
No one provider has this type of control to set
the market and rule aside from the government
in power.

3. Social Welfare Made a

Priority
Production and benefit is taken on by the
society as a whole and less divisions form as a
result.

CONS

1. Less Innovation
A free market encourages innovation and
change, but a command market does not
reward this type of unique thought.

2. Restriction of Freedom
All jobs are aligned with needs at that time and
you have little freedom of choice.

3. No Competition
The benefits that can be gained from
competition are not seen in a command
economy.

Reference
http://nlcatp.org/6-key-pros-and-cons-of-a-command-economy/

Shmoop Editorial Team. (2008, November 11). Types of Economic Systems.

Retrieved May 6, 2015, from http://www.shmoop.com/economicsystems/types.html
Command economy. (n.d.). Retrieved May 6, 2015, from
http://global.britannica.com/EBchecked/topic/127708/command-economy
Command economy. (n.d.). Retrieved May 6, 2015, from
http://www.investorwords.com/951/command_economy.html