FILAMER CHRISTIAN UNIVERSITY

College of Teacher Education

Accredited Level IV- ACSCU-ACI
Roxas City, Capiz

Name: Vanessa Ericka A. Lara Year/Section: BSED-2A Schedule: 8-10:00 (daily)

SS11- COMPARATIVE ECONOMIC PLANNING
Summer Class-2020
Significantly, “Economy” frequently refers to just one
particular aspect of human behavior, namely the attempt to
make optimum use of scarce resources to satisfy needs which,
by contrast, are numerous and unlimited. Lately, you can often
hear the most diverse signs that attempt to describe a new era in
the development of the economy. Taken from the great leap of
the society from primitive to modern, the economy is not in a
separate chamber; as we continue to thrive, economy simultaneously doing the same.
I am talking about “Modern Economy.” And in this, we will try
to explain the origin and context of the emergence of certain
economy. If in explaining the new and current scientific
disciplines that occur under the auspices of the economy, we
start from the very first concept of economics in its original
meaning of the Greek word "oikos" meaning home, house and
"nomos" meaning legality, then we can just economy defined as
the science that studies the laws that are
Logistics refers
related to the house, household and
to the overall
phenomena that are closely associated with the provision of meeting the
process of
diverse needs of man.
managing how
To start with, let us understand in a simple manner what the term resources are
“Logistics” trying to imply is. Apparently, it refers to the overall process acquired,
of managing how resources are acquired, stored, and transported to their stored, and
final destination. Meaning to say, logistics could be understood as the transported to
management of the flow of things between the point of origin and the their final
point of consumption in order to meet requirements of customers or destination
companies. Now, all modern economies, whether socialist or capitalist,
planned or unplanned, have some common outstanding features.
 We find that there is minute division of labor and specialization so that there is co-
operation and interdependence among a host of producers and consumers based on an endless
chain of exchanges. The village self-sufficiency and isolation, which characterized primitive
economies, have disappeared. In this, I deemed to understand that a large proportion of the com-
munity’s resources are diverted from current consumption to the production of tools, machinery
and equipment; and so, there is capital formation on a large-scale making provision for the
future. That is why it is fondly termed as Modern Economy.
Now let’s proceed to the general characteristics of Modern Economy.
In line with that, the article authored by Larisa Frolova and Katerina Kovalyova,
entitled: THE GENERAL CHARACTERISTICS OF MODERN ECONOMY, will provide
us a thorough exposition of the characteristics of a modern economy. To mention, the aim of
article is to: ground the common characteristics of modern economy which are observed as
the preconditions of logistic approach application in order to control the process of goods and
services flows formation. Notice, which what modern economy is trying to protrude is that,
there is extensive use of plant and machinery and modern equipment. And consequently, the
system of production, instead of being simple and direct, has become indirect and roundabout;
or indirect. It is a continuous and circular process like the ‘egg-chicken-egg’ sequence.

1.) Integration as a consequence of economy logistization.

Integration itself typically includes the reduction or
elimination of trade barriers solely because of
controlling the efficient, effective flow of goods
and services. It was mentioned that it is a natural
reaction of market to the excessive chaotic
character of relations between functioning areas. It
means, modern economy welcomes the flexible
and efficient manner, which utterly shows that
somehow, friction among customers and sellers are
happening in different platforms and situations.
An efficient organization of logistic flows
requires not only market mechanisms of logistic
processes regulation, but also state ones which are
based on business legislation, policy and strategy
which provides an economic independence for the country and safety for its people from hunger
and poverty. Now, notice when we somehow experiencing scarcity after devastating typhoon or
calamity, whining around why supplies are not properly arriving on time, or in the right amount,
enough for the number of people living in a definite place. As you can see and notice on
highway, take a look at the six-wheeler trucks loaded with goods or products, then you’ll notice
on the side wing of the truck, there you can see and read: “Perishable products, do not delay”
 The openness of society for the international cooperation
requires such organization of business activity which can meet the
world requirements and provide competitive capacity. In this, no
secret that today’s society demands for international standard in
almost everything. It is true and important, since it enable and
provide society with efficient ways to get work done while
maintaining the safety of producers who create and provide
goods and services, as well as the end-users receiving the
benefits from these goods and services.
Even in school, we are required
to push through our capabilities
in order not to get shifted out
from the department. “Wow!
Pang-international...” that’s
exactly the remarks we tend to
hear whenever something looks
nice and amusing. Same manner
applies in marketing
management; in which it aims at
providing competitive advantages
not only for the definite goods but
also for the whole enterprises.
Therefore, regulative role of the state is assumed to be only an influence on logistic process
integration. Just means to say, that when firms compete with each other, consumers get the best
possible prices, quantity, and quality of goods and services. Antitrust laws encourage companies
to compete so that both consumers and businesses benefit. One important benefit
of competition is a boost to innovation.
Because economists and policymakers believe
economic integration leads to significant
benefits, many institutions attempt to
measure the degree of economic integration
across countries and regions. The
methodology for measuring economic
integration typically involves multiple
economic indicators including trade in goods
and services, cross-border capital flows, labor
migration, and others. Assessing economic
integration also includes measures of institutional conformity, such as membership in trade
unions and the strength of institutions that protect consumer and investor rights.
 2.) Informatization role and place in terms of Modern Economy
Every type of integration requires an appropriate data ware. When two businesses
are brought together through a merger or takeover, it is possible to define the nature and
type of integration based on the activities of each business and where they operate in the
supply chain of an industry. Take a quick look at the diagram below:

As you can see, backward

vertical integration, this involves acquiring a business operating earlier in the supply chain – e.g.
a retailer buys a wholesaler, a brewer buys a hop farm. Then, the Conglomerate integration, this
involves the combination of firms that are involved in unrelated business activities. Whereas,
Forward vertical integration involves acquiring a business further up in the supply chain – e.g. a
vehicle manufacturer buys a car parts distributor. And in Horizontal integration, businesses in the
same industry and which operate at the same stage of the production process are combined. Now,
in the article, it says that logistic integration into Ukrainian economy particularly, would be
impossible without national information resources, or (NIR’s)
To sum up the idea of the second characteristic
of modern economy, let’s understand the term
“informatization” in the context of economics.
Informatization or informatisation refers to the extent
by which a geographical area, an economy or a society is
becoming information-based of ages of human
civilization: the Agricultural Age, the Industrial Age
and the Information Age (1978). Informatization is to
the Information Age what industrialization was to the
Industrial Age. It has been stated that: The Agricultural
Age has brought about the agriculturization of the
planet. The Industrial Age has caused among other
things the industrialization of agriculture. The
Information Age has resulted to the informatization of
the agricultural industry. The term has mostly been used within the context of national
development. Everett Rogers defines informatization as the process through which new
communication technologies are used as a means for furthering development as a nation
becomes more and more an information society.
 Nowadays, aspects of living has almost influenced by the thriving emergence of
Information technology. In this, I deemed to understand that
when in the past few decades that there has been a revolution in
computing, it accompanied also the dramatic increases in the
power and use of new information technologies that has been
declining the cost of communications. In modern economy, all
that we can see right now, the gadgets, high-end equipment, it all
streamed processes to change management considerably. It was mentioned in the article,
that the fundamental role of scientific and technological achievement is in the
development of so called scientific and technical pathways of humane sciences.
By Informatization, I refer to the process primarily by
which information technologies, such as the world-wide web
and other communication technologies, have transformed
economic and social relations to such an extent that cultural and
economic barriers are minimized. So, it is a small world after
all. Moreover, the convergence of technologies will precipitate further changes that
promise to fundamentally alter the human landscape; and I deemed to believe that when
that happens, maybe we’ll not going to witness it.
Additionally, the economic aspects of exchange and consumption stimulated the
development of virtual economy. When we say virtual economy, then we are talking
about an economic system that exists within a virtual environment, often in the context of
an Internet game. So it initially pertain to economies emerged as exchange systems with
values that were applicable only within the confines of the game. Multiple contemporary
virtual economies have produced virtual monies, goods, properties and services that have
been sold or traded for "real" world monies, goods, properties and services. Images below
are the obvious examples today:

Gamers, generates income from Diamonds for sale, in Mobile Legends

online tournaments Diamonds for sale, in Mobile Legends
“Internet-trading”
Simply, if I am an online trader, I have much more control over
trades than the traditional trader. Why? Because we can execute
trades considerably faster than they ever could face-to-face or over
the telephone. Apart from being able to manage multiple positions
simultaneously, the online trader has access to extensive data. Online
brokers and other websites provide comprehensive information on
companies, exchanges, and markets.
Just means to say, the Internet has opened the door to the investment world to a wide range of
people. Today, not only can wealthy people execute trades, but also individuals further down the
socioeconomic ladder.
W o r l d m a r k e t
Remember, internet provides varied
efficient platform that suits for every
trading contracts we want to engage
with. But, taken the fact that we are
free to do anything on the internet,
BUT we are not free to alter the
consequence if we got into trouble with
our poor choices, especially with
money-involved. With platforms we
use in online trading, yes, we gain
profit. But still be careful on what looks
appealing to the eye. Since the
moment people strive to gain profit,
there were also people who just
wanted to steal profit.
through technology, and making it easier for marketers to reach global
“When an market. Marketing organizations now have to target not just domestic,
organization thinks but international markets. Target market of a marketing organization
globally, it looks for will be limited if it just concentrate on domestic market. When an
overseas organization thinks globally, it looks for overseas opportunities to
opportunities to increase its market share and customer base. As a result, it gives boost
increase its market to a brand’s reputation; brand that sold internationally is perceived to
share and customer be better than the brand that sold locally. Relatable, we people like to
base.” purchase products that are widely available; since we don’t what to
cram with unavailable goods in our parameter. Hence, international
marketing is important to boost brand reputation since Expanding
business into an international market gives a business an advantage to connect with new
customers and new business partners.
 For example: Apple - the tech giant designs its iPhone in California; outsources its
manufacturing jobs to different countries like - Mongolia, China, Korea, and Taiwan; and
markets them across the world.
Apple have not restricted its
business to a nation, rather
expanded it to throughout the
world. The opportunities for
networking internationally are
limitless. The more "places" a
business is, the more
connections it can make with
the world. Open door for
future business opportunities.
International marketing not
only increases market share
and customer base, it also helps the business to connect to new vendors, a larger workforce and
new technologies and ways of doing business. For example – American organizations investing
in Japan have found programs like – Six Sigma and Theory Z which are helpful in shaping their
business strategies.

The country of Ukraine is an emerging free

market economy.
This growth was halted by the global financial crisis of 2008,
but the Ukrainian economy recovered and achieved positive
GDP growth in the first quarter of 2010. By October 2013, the
Ukrainian economy lapsed into another recession. The
information resources forming in order to provide the logistic activity in Ukrainian economy
requires solving the next priority problems:
 To determine legal status for all types of information, to protect rights for the
business-structures and state for receiving and using information, to set
responsibility for the information resources (IR) collecting and its proficient
using;
 An application of economic mechanisms in order to form and use IR in
order of logistic scientific and technological activity. In this, again,
technology plays crucial part in making sure that economic mechanisms are
properly reinforced;
 Further improvement of financing the government contractual orders on
logistic information about economic security of Ukraine and its citizen’s safety.
Apparently, he most important determinant of national happiness is not income
level - there is a positive association, but rising income seems to have little effect
as wealthy countries grow wealthier. Rather, the key factor is the extent of
 income security, measured in terms of income protection and a low degree
of inequality.

 Stopping spontaneous formation of information market, determination of

logistic information pricing, and adopting the laws on the
information security. Hundreds of assistance programs from
the government—in the form of money, information, and
services—are available to businesses and entrepreneurs; On
top of all of this, the government occasionally takes
extraordinary steps to protect businesses in dire economic
conditions. 
 Creation of effective Global Network and corporate
information systems with the complex of information
security facilities. In today’s era, globalization allows free flow of capital also
authorizes foreign transactions around the world such as foreign commercial
and investment banking, and foreign bonds.
Due to the stated reasons above, the strategy of structural and innovation reorganization
in the country of Ukraine must be based on the logistics management which is aimed at social
modifcation. As I have been aware that the country of Ukraine, one of the poorest coutry in
Europe; since they attain independence, they are in ken interest to thrive for country’s
development. It is especially important in a modern envronment of world economy globalization.
In this, contemporary expansion of globalization scales caused the diversity of new epoch
interpretations which totally differs from all previous ones in regard to the high level of world
economy inforrmatization. With all that, in the context of informatization, I deemed to somehow
understand, that economy is really complicated; but the thing is, we strive to improve it in all
possible efficient way we can, in order to have also improved qaulity of life. I mean, the sole
apparent reasin for majority is: better infrastructures and more jobs improves the economy and
rases the standard of living for its citizens.

3.) An influence of economy globalization on logistic process of business

entities.
Logistical processes facilitate the relationships between production and the movement of
products. Specifically, logistical processes should address many of the aspects of production,
including time, costs and quality. When a company successfully coordinates these logistical
processes, the company can track the process through production, consumption, storage and
disposal.
A functional logistical process also relies on the
proper geographical location of all assets within the
organization. Meaning to say, a logistical process
tries to find the best solution for manufacturing and distributing goods by considering how the
market uses these products.

Fundamentally,  logistics management is the control and supervision of the movement of

goods. However, the scope of managed processes reaches far more than that. It involves a
multitude of different factors including transportation management, freight and inventory
management, materials handling, and order fulfillment.
Dialectical contradictions of globalization
processes lay the philosophical basis of improvement of Economy globalization refers to
the globosystems management on the principles of the increasing interdependence
logistic. In this, Globalization provides businesses with a of world economies as a result
competitive advantage by allowing them to source raw of the growing scale of cross-
materials where they are inexpensive. Globalization also border trade of commodities and
gives organizations the opportunity to take advantage of services, flow of international
lower labor costs in developing countries, while capital and wide and rapid
leveraging the technical expertise and experience of more spread of technologies.
developed economies.
Have you heard ‘transnational corporations? If yes
or no, then notably, you have encountered or entered on one of it somehow. Simply because, a
transnational corporation is a group of business that operates in more than one country. And to
mention, here in Philippines, below are just some of the many of the examples of transnational
corporation:

World’s economy globalization is characterized by the growth of transnational corporations’

economic expansion as they extend relations between their branches all over the world.
Moreover, it strengthen the dependence of less developed countries on the richest countries. By
moving production to countries with lower standard of living and wages they can hinder the
“The advantages of growth of living standards. Here in Roxas City, due to the
financial and high steadfast opening of international establishments and companies,
intellectual labor forces locals are given chance for employment opportunities.
concentration follow
TNC to apply logistic
approaches to allocate
plants, organization
raw material purchase
and integrated products
distribution.”
That’s how the logistic approaches tend to work; notice that in a simple manner, from the
guiding principles, attitudes and driving forces that help you coordinate plans, goals and policies
between different partners across any supply chain, it helps you increase the supply chain
performance while improving supply chain management as a whole. In this, efficient
management is the key to success, especially in supply chain management.

There are various factors involved in effective logistics

management, for example, automation and perfect
coordination. But, there is always a scope for improvising
the process. When your business witnesses growth, you
must find ways to streamline a logistic planning process for
improving output. 
The global economy refers to
the interconnected worldwide economic activities that take place
between multiple countries. These economic activities can have
either a positive or negative impact on the countries involved. An
significantly, from long ago, it has changed significantly over the past
few decades, in the way that it is organized and governed by
collaborating nations. And these changes have repercussions that not
only affect the flow of goods and services between countries, but also
the movement of people. 
As per the article mentioned, the “ The success of opportunities for global
expansion are infinite. If it is globalization processes infinite, then all the
potential growth is alluring. depends on the effective However, factors in
reality, that success comes through a well-defined plans and
management, in which the
consistency. The success of globalization processes
depends on the effective
logistic control over the management; it means,
that effective management is draw flowing of inventory from the logistic
processes itself. It is utterly showing holdings, labor force, an idea of domino effect.
When inventory holdings are capital and services plays properly monitored and
stabilized, when the labor force is a major role.” its consistent upward
performance, and capital (both monetary and machinery)
are both well- maintained and
contained, then the results are quite astounding.
“World experience in
Any successful business leader will acknowledge the evolution of economic
crucial importance of effectively organized logistics. They management confirms
understand that implementing seamless logistics is a key (acknowledges) the necessity
element in keeping pace with customer demands and of logistic conception usage in
outperforming competitors. In this modern world, we tend a modern management while
reaching goals of enterprise
on the basis of compromises
in business processes on
micro-and macroeconomic
levels”
not to notice, for example, if you look at effective transport done right, you might get the
impression that it “seems simple”. It actually requires a lot of special knowledge, skills and
professional management to get it look so “effortless. Don’t let the end result of good logistics
fool you – it takes a lot of specialized assistance to get it to flow so smoothly.

Just in case, we might notice in this

context, as businesses grow and expand
(regionally, internationally or even
globally), they become more reliant on
effectively organized supply chains which
includes sophisticated logistics. As we
people, personally, if a business is big and
popular, we develop trust to them; because
in our mind, they would not betray or
disappoint us. This element of supply
chains is not something that “only matters
in large-business development”. It is just as
crucial in terms of improving efficiency and profitability with smaller and medium-sized
business as well. Customers now not only include your neighbors and local friends; they include
people from across the globe, as well. Regardless of the distance, each customer expects their
products to be delivered quickly and flawlessly.
Thus, logistic management is based on the integration
and globalization of the world economic processes, which are
provided by the economy of information-oriented society, build
on the internet principle of its formation and its usage of
electronic commerce and organization of marketing service. In
this, we can arrange the idea that logistic management is wired
to be dependent on how globalized the society is, and vice
versa. Crossing the mind-baffling article, it is important to
understand that when time comes you will become a business
tycoon, and if you wish to trump over your competitors, you should adapt the latest technology
and innovative approach. For the apparent aim of effective logistics management is to improve
the efficiency of the operations, ensuring customer satisfaction, and increase productivity within
any given possibilities.
Nonetheless, the stated general characteristics of Modern economy comes with the three
apparent concept from each of them, respectively. Modern economy could be seen as the first
given characteristic talked about; First, integration as a consequence of economy logistization.
The more emerging new ways exist as days pass by, more integration happens. Remember, we
ne need to get into flow and provide a sense of globalized standards among organizations. We
must step the right foot towards the thriving economy these days. Second, informatization
talking along with an informed and knowledgeable society: modern economy combined with
modern mindset of people, encourages efficient way of succeeding. Just as we tend to live, we
then must conform to the modern conventional ways in the aspects of vying success in our
economy. Lastly, how globalization affects the run of economy is quite astounding. It is deep
penetrating and has long-lasting effect. Notice now, the way companies uphold to run their
business is much probably inspired by the global standards.

MODERN ECONOMIC SYSTEMS

Right before we dive into this another topic, let us have a concrete definition
of what really a Modern Economy tries to conceptualize. The term “modern”
comes from the Latin word “modernus”, from modō, meaning “just recently.”
Most of the time, modern simply refers to something related to the present or
recent past, as opposed to the past or the distant past. So probably, when I utter the
terms: Modern Economy, then I am referring to large set of inter-related
production and consumption activities that aid in determining how scarce resources
are allocated vying existed in this present era.
Now let’s get into it!

*Types of Modern Economic Systems*

Modern economies differ in two respects.1 First of all, they differ with respect to how
economic activity is coordinated. Since there are two types of coordinating mechanism, one
being the market (contract) and the other being command (directive), there are two
corresponding types of modern economic system, namely: market economic systems dominated
by the market and command economic systems
dominated by command. Modern economies
also differ with respect to who owns the means of
production; who has the right to acquire, keep,
use, and dispose of them and of the products or
income they generate. Since the means of
production may be owned either privately or
publicly, there are two corresponding types of
modern economic system, namely: capitalist
economic systems based on private ownership of
the means of production and socialist economic
systems based on public ownership of the
means of production.
Now, if happened that two types of coordinating mechanisms and the two types of ownership of
the means of production are combined, then we’ll have: Four pure types of modern economic
system.

Types of Modern Economic System

OWNWERSHIP OF THE MEANS OF PRODUCTION
Private Public

Market
Market capitalism Market socialism

COORDINATING
MECHANISM

Command Command Command

capitalism socialism

FIGURE 2.1 (Pure types of modern economic systems)

The types of modern economic systems illustrated in figure 2.1, shows how the ‘public’ or
‘private’ ownership emanates a system, as per respect to what coordinating system it belongs.
So, apparently, modern economic systems could be understood as the following:
-Private ownership in a market economy creates a concept of ‘Market capitalism’;
whereas private ownership in a command economy creates a concept of ‘Command
capitalism.’
-Public ownership in a market economy creates a concept of ‘Market socialism’;
whereas public ownership in a command economy creates a concept of ‘Command
socialism.’
Since each pure type of modern economic system is characterized by one type of
coordinating mechanism and one type of ownership when it comes to the means of production,
the four pure types above differ with another as to respect with their structure of economic power
and economic decision-making. Right before discussing each of these modern economic system,
let’s make a concrete concept of what is the elicited idea that surrounds a modern economy and
its four pure types.

MARKET CAPITALISM
In a market capitalist economy, it has an apparent concept that factors of production are
owned by private individuals. Take note: private individuals,
not with people from government posts. So, the essential Market capitalism is
feature is private enterprise and the motive of production is usually defined as a
solely for profit purposes. Let’s take the USA as an example. system where private
In USA, production is undertaken on the individuals and
basis of the market forces of demand and corporations own the
supply. In this setup, the country managed means of production,
to create products inclined to what the where private
people demand. As a result, the investments drive the
commodities in the market would be more in
economy and where
needs and comforts.
competitive markets link
One more thing, the prices, are employers and workers.
fixed by the market forces. In
market capitalism, the policy of
minimum intervention is followed by the government. Meaning to say
the government’s role is limited to giving licenses and in settling any
kind of arbitration in economic aspect. In this, in a capitalist market
society, prices can be set on items the amount one pays for it what the true cost of a product or
service costs. In addition, market capitalism is in pursuit of determining price and production
goods and services. Because, on one hand, it is focusing on the creation of wealth and ownership
of capital, as well as factors of production. Society where market capitalism exist, it would be
visibly show that production and pricing of goods are determined by the market, or supply and
demand. However, you might ask, what does the government do? Then, some regulations of
course may occur in place of government role.
Let’s have an example.
Suppose I am a seller of a branded shirts for $25 each, and a buyer wants to buy that shirt for
$20. Now, between me and the buyer, a transaction will occur. In Tagalog, “tatawad ka.”
Transaction itself will come to agree or not on the price. Because in a market capitalist system, it
is in pursuit of supply and demand, that leads to free competition in the economy, without any
stringent intervention from outside forces.

MARKET SOCIALISM
Market socialism is an economic system in
which firms and means of production are owned and
controlled by the government. Yet, firms sell their
products to consumers in competitive markets. In other
words, market socialism is based on social (cooperative
or public) ownership of the means of production but
within the context of a market economy. When we
consider the means of production, we can identify two
types of market socialism:
 Cooperative ownership of the means of production in a market economy: employees are
at the core of this system. Workers own the enterprises as well as the profits of their
operations; and
 Public ownership of the means of production in a market economy: in this case, firms are
owned and managed by public authorities while profits are divided among all citizens.
In market socialism, the government is largely involved in the economic
sphere but private property is not entirely abolished. In fact, while in socialist
systems everything was owned and controlled by the government, in this case,
enterprises work within the framework of a competitive market economy.
Market socialism – also known as “liberal socialism” – is a moderate form of
classic socialism. In fact, in a market socialist system, the government does not have control over
all means of production and does not oversee the entire process of production. It revolves around
the idea of equilibrium of the market. According to Oskar
Lange, the main supporter of such theory, the economic activity
should be established and coordinated by a planning board
(comprising members of the government). Prices should be set
by the government and firms should be directed to produce until
the cost of production equals the cost previously foreseen by the
board. Subsequently, the board should adjust prices in order to
achieve a market equilibrium (equilibrium between supply and
demand).
 Moreover, I could probably tell that ownership matters. Because it gives people a say on
the things they cared about. Being owner in a business for example, it gives people motivation
and state in its success. Sadly, if you come across with people and ask the, people will say that
they have no influence. No influence in workplace, on businesses, and over the economy as a
whole. But in market socialism, people are way very different; they protrude to control together
especially those closest to the business; customer, employees, residents, suppliers and distant
shareholders. All of them has an equal say in how a business run and even decide what to do
with the profit. As a matter of fact, all people has control on things that matter; clearly, in market
socialism, all work together.

COMMAND CAPITALISM
First and foremost, let’s take a quick moment to understand Capitalism. It is an economic system
in which the economy is profit-driven and the production and services are mainly determined by
market forces that is i. e; consumers, producers, marketers and investors.

Concept of capitalism is a system based on the private ownership of the means of

production and their operation for profit. Whereas command economy is where
investment, production and the allocation of capital goods take place according to
economy-wide economic plans and production plans.
While, the government plays role as an intermediate and implement only the rules set by
economy contributors. Command capitalism: A system where the government, and the market
forces decide both, which should be produced and consumed. Simply, this is a mixture of
capitalism and socialism; therefore, it is called mixed or planned economy.
As a pure type of modern economic system, command capitalism is characterized by
private ownership of the means of production and state coordination of economic activity. Don’t
think of it as interchangeable concept with market capitalism, since the two has a quite difference
between them. Consequently, although nominally pluralistic, command capitalism is a vertically
organized, centrally directed and closed economic system. This implies that private ownership of
the means of production is an empty shell because economic power and economic decision-
making are concentrated in the hands of government, that the economy is subordinated to and
controlled by political power. A concrete example is provided below:
Most command economies today like Cuba no longer function as pure
command economy. Since they made significant reforms to improve the
condition of the nation. Meaning to say, many businesses have been
privatized and no longer operate under the authority of the government.
I n t h i s , w Command
e capitalism m i g
promoted. As the concept of free market utterly shows, that there’s lacks a free market and,
voluntary exchange and the laws of supply and demand provide the therefore, rational
sole basis for the economic system, without government prices reflecting
intervention, in a command capitalist society, government is on the scarcity and consumers’
track to command. The three basic economic questions in this kind preferences, in
of economic system doesn’t quite rely on the market itself, but on directing economic
the information provided by subordinate units. Just means to say, in activity the government
that kind of setup, it contains tension between private ownership of has to rely on non-
the means of production and command, so that it is by its nature a market information,
transitory economic system, having a tendency to turn either into provided by
market capitalism or remain into command capitalism. subordinate units.

COMMAND SOCIALISM
Having sense of command in a socialist
economy quite possess perplexing concept.
Now, it was said that command capitalism and
market socialism are not the only alternatives to
market capitalism. Yet another, is what we call the
Command Capitalism. Better yet to know an
apparent concept of this, command economic
systems suggests that factors of production are
publicly-owned.
 As the stretch of words suggest, command socialism rejects both market coordination and
private ownership of the means of production, and is intrinsically linked with authoritarianism of
which it is a product. Just means to say, that the state owns and controls most of the factors of
production, including land and capital goods. The state also engages in central planning; in
which production of goods and services, as well as their prices and distribution, are centrally
controlled by the state. In command socialist economy, everything done by government is done
by people wielding government power. They are subject to the same limitations with which we
all must contend. What a government knows is simply what individuals in that government
know. Just means to say, when command economy in socialist perception collide, it will show a
subordinated state of economy to the government’s political power. To understand thoroughly
the concept of Command Socialism, take a look at the illustration below:

Notice, the check symbol on

the left image, denotes the willpower to decide; whereas image on the right with wrong symbol
denotes overlooked freedom of consumers to decide what products should be produced. Notably,
economic power are concentrated on the hands of the government; not by consumers’ preference
in which as this economic system suggest physical rationing. Meaning to say, government decide
what to produce and how much every citizen should buy and acquire only. To mention,
employees as compared to the freedom they have right now where they can choose employment
post to enter, in a command socialist economy, the government solely decide where to put people
on the jobs created. And what might be infuriating to that is, you can’t choose nor decide
employment for yourself. All in all, the ideological justification of command socialism is this: It
would do away not only with income from private property and the exploitation of wage labor by
capital, but also with the ‘anarchy of the market’ and the government is the best judge of what is
good for society.’ It clearly speaks itself that in this kind of setup, government is the solitary
authority to decide what should be destined to transpire. From getting into ins and outs of
productions to the distribution and consumption, the government designates a penetrating power
in economic aspect. As per every society with this kind of economic system in hand, it might be
quite exasperating to the part of an ordinary person; but quite tingling ecstasy to those in the
upper hand, which is the government.
***