Command Economies: Features and Disadvantages
Learn about command economies characterized by high government involvement. Explore socialism, communism, and their impact on societies. Discover the disadvantages and how leaders have addressed them worldwide.
Command Economies: Features and Disadvantages
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Presentation Transcript
Command Economy Chapter 2 Section 3
Basic Definition & Characteristics • Chief Characteristic: High level of government involvement in the economy • Centrally planned Economy/Command Economy • Economic system • Government makes all the decisions on the 3 economic questions
Command Economies oppose • Private property • Free-market pricing • Competition • Consumer choice • NO CONSUMER SOVEREIGNTY!!!
Socialism • NOT a single economic system • Describes wide range of economic & political systems • Based on belief that wealth should be evenly distributed (economic equity)
Some socialism coexists with free-market ‘Market Socialism’ • Government uses powers of taxation to redistribute wealth & provide extensive services • Some industry owned by government, some privately owned
Communism • Centralized government owns all resources • No free-market! • Key aspect: Authoritarian Government (political)
Karl Marx Communist Manifesto • All conflict is social class conflict • Capitalist class will gain ownership of all resources • Proletariat (workers) will be exploited • Rich get richer, poor get poorer
Proletariat rise up in bloody revolution • Capitalists overthrown • Communist party redistribute wealth evenly • Classless society will result
Questions: page 37 USSR • Who was Joseph Stalin? • What did the Soviets allocate all their factors of production to? • Why? • What was the effect of the decision to favor heavy industry?
What were farmers forced to do? • What was the result? • What contributed to the fall of the USSR?
China • In the 1950’s what did the Chinese government do to many peasants? • What was the result? • How did the government react to the results? • What new policies were instituted in the 1970’s?
Disadvantages of Centrally Planned Economies • Describe/define each disadvantage of Command Economies. • Economic Efficiency • Economic Freedom • Economic Growth • Economic Equity • Additional Goals
What have the disadvantages of Command Economies/Centrally Planned Economies led leaders in many countries to do?
