Command Economy Definition, Characteristics, Advantages & Ex

Summary

A command economy is characterized by government control over financial management, exemplified by countries like Cuba, North Korea, and Nazi Germany. Key features include government pricing, job assignment, regulated wages, state ownership, and centralized decision-making. While it offers benefits like low unemployment and universal healthcare, it also leads to limited freedoms, potential corruption, and severe punishments for dissent.

Takeaways

• 🏛️ A command economy is characterized by the government's control over the financial management of a country.
• 👨‍✈️ Countries like Cuba, North Korea, and Nazi Germany are examples of command economies where the state dictates economic activities.
• 💼 The government in a command economy sets prices for goods and services, determines wages, and can even assign jobs to individuals.
• 💸 In a command economy, the state regulates wages, which are often just enough to survive, leading to potential black market activities.
• 🏭 The state has absolute control over all resources and owns or heavily controls all businesses and industries.
• 👥 People in power, such as politicians, have the authority to give orders to buyers, sellers, and investors.
• 🏥 Advantages of a command economy include low unemployment rates due to job regulation and universal access to basic healthcare services.
• 🏡 In Cuba, housing is provided for free by the government, but individuals cannot own homes as the state retains ownership.
• 🚫 North Korea's command economy is marked by severe restrictions on personal freedoms, with public executions and strict control over international trade.
• 🛃 Nazi Germany's command economy involved the state controlling all aspects of economic life, including forced labor and leisure activities.

Q & A

What is a command economy?

A command economy is an economic system where the government has control over the financial management of the country, including the pricing of goods and services, job assignments, and resource allocation.

What does the term 'command' signify in the context of a command economy?

In the context of a command economy, 'command' means that the government gives orders and has power over various economic aspects such as wages, pricing, and job assignments.

What are some main characteristics of a command economy?

Characteristics of a command economy include government control over pricing, centralized financial decisions, regulated wages, absolute power over resources, state-owned entities, and directives from politicians to economic actors.

What are the advantages of a command economy as mentioned in the script?

The advantages of a command economy include low unemployment rates due to job regulation, universal access to healthcare and necessary services often at low or no cost, and quick decision-making by government officials.

Can you provide an example of a country with a command economy?

Cuba is an example of a country with a command economy, where housing is free but owned by the state, and there is strict government control over wages and pricing.

How does the government in a command economy like Cuba control its citizens?

In Cuba, the government controls its citizens by regulating wages, housing, and employment, and by monitoring public spaces to maintain control and suppress dissent.

What is the economic situation in North Korea according to the script?

North Korea operates under a command economy with severe government control, including public executions and strict punishment for those who oppose the state or attempt to escape.

How does the command economy in North Korea affect personal ownership and trade?

In North Korea, personal ownership is restricted, and the government controls all international trade, leading to limited support from the international community.

What was Adolf Hitler's approach to the economy in Nazi Germany?

Adolf Hitler ran a command economy in Nazi Germany where the government controlled finances, job selection, citizenship, and trade, with severe consequences for non-compliance.

How did the command economy in Nazi Germany impact unemployment and personal freedoms?

While unemployment rates dropped in Nazi Germany, the command economy led to a loss of personal freedom, with forced labor and leisure activities, and severe punishment for dissenters.

Outlines

00:00

🏛 Understanding Command Economy

A command economy is characterized by the government's control over financial management, including the pricing of goods and services, job assignments, and resource allocation. This system is exemplified by countries like Cuba and North Korea. Key features include government control over wages and pricing, state-owned entities, and rapid decision-making by officials. Advantages include low unemployment rates due to job regulation, universal access to healthcare, and swift governmental decisions. However, command economies can also lead to a lack of personal freedom, limited private ownership, and potential corruption due to strict governmental control.

05:00

🌍 Examples of Command Economies

Cuba, North Korea, and Nazi Germany serve as historical examples of command economies. In Cuba, housing is free but owned by the state, leading to overcrowded public transportation and low salaries, prompting some to seek additional income illegally. North Korea is marked by severe punishments for dissent, including public executions and imprisonment. Nazi Germany's command economy involved government control over jobs, trade, and even leisure activities, with disobedience leading to concentration camps. Despite some advantages like low unemployment and access to services, these examples highlight the significant loss of personal freedom and the potential for abuse of power in command economies.

Keywords

💡Command Economy

A command economy is a system where the government has control over the financial management of the country, including the production, distribution, and pricing of goods and services. This term is central to the video's theme, as it is used to describe the economic systems of countries like Cuba and North Korea. The video explains that in a command economy, the government dictates all financial decisions, such as wages and job assignments, which is exemplified by the script's mention of how people in these countries are assigned jobs and have regulated wages.

💡Government Control

Government control refers to the authority of the state over various sectors of the economy, including the pricing of goods and services, job assignments, and resource allocation. The video emphasizes this concept by highlighting how the government in a command economy makes all financial decisions, as illustrated by the script's discussion of Cuba's housing policy and North Korea's strict control over its citizens' lives.

💡Regulation

Regulation in the context of the video pertains to the rules and policies set by the government to govern economic activities. It is a key aspect of a command economy, where the government sets the hourly rate of pay for workers and controls the pricing of goods and services. The video uses the example of Cuba, where the government controls salaries and housing, to demonstrate the extent of regulation.

💡Black Market

The black market refers to the illegal trade of goods and services outside of government regulation. The video mentions the black market in the context of command economies where people might try to break the rules to make more money, as the regulated wages are often just enough to survive. This is exemplified by the script's statement that people in command economies might sell goods on the black market.

💡State-owned Entities

State-owned entities are businesses or organizations that are owned and controlled by the government. The video discusses how in a command economy, the state has absolute power over all resources and owns entities such as banks, transportation systems, and communication establishments. This is illustrated by the script's mention of North Korea's control over its natural resources, banks, and other establishments.

💡Unemployment Rates

Unemployment rates are a measure of the percentage of the labor force that is jobless. The video points out that one advantage of a command economy is low unemployment rates due to government regulation of jobs. This is demonstrated by the script's reference to Cuba, where the government controls job assignments, leading to low unemployment.

💡Healthcare Services

Healthcare services in the video are discussed as a benefit of a command economy, where everyone has access to necessary services, often at low or no cost. This is mentioned as one of the advantages of the command economy, indicating that while the government controls many aspects of life, it also provides for basic needs such as healthcare.

💡Quick Decisions

Quick decisions refer to the ability of the government in a command economy to make swift choices regarding economic policies and regulations. The video suggests that this is an advantage of such a system, as decisions are made by state officials without the need for lengthy negotiations or democratic processes. This is exemplified by the script's mention of Cuba's ability to make quick decisions under the leadership of the Castro brothers.

💡Public Executions

Public executions are a form of punishment that involves the killing of individuals as a deterrent to others, often carried out in public. The video uses this term to describe the extreme measures taken by the North Korean government to maintain control and suppress dissent. The script mentions that public executions have occurred in North Korea as a means to instill fear and maintain state control.

💡Nazi Germany

Nazi Germany refers to the period of German history from 1933 to 1945, when the country was under the totalitarian rule of Adolf Hitler and the National Socialist German Workers' Party. The video uses Nazi Germany as an example of a command economy, where the government controlled all aspects of life, including finances, job selection, and trade. The script describes how people were forced into certain jobs and leisure activities, and how dissent was met with severe punishment, including concentration camps.

Highlights

A command economy is characterized by the government's control over the financial management of the country.

In a command economy, the government sets the prices of goods and services.

The government makes all financial decisions, including the hourly rate of pay for workers.

People may attempt to break rules to make more money, such as selling goods on the black market.

The state has absolute power over all resources in a command economy.

Command economies feature state-owned entities as well as privately owned entities controlled by the state.

Politicians in power give orders to buyers, sellers, and investors.

Command economies can have low unemployment rates due to government regulation of jobs.

Everyone has access to healthcare services, often at a low or no cost.

Decisions in a command economy are made quickly by state or government officials.

Cuba is an example of a command economy with housing provided for free but owned by the government.

In Cuba, people often work additional jobs without government knowledge due to low salaries.

North Korea's command economy is marked by severe punishments for those who oppose the state.

The state in North Korea controls all aspects of production, distribution, and trade.

Corruption is common in North Korea due to the limited freedom and control over international trade.

Nazi Germany is known for its command economy where the government controlled finances, jobs, and trade.

Unemployment rates dropped in Nazi Germany, but at the cost of personal freedoms.

Transcripts

a command economy is an economy in which

the government has the power over the

financial management of the country

imagine for a moment that your friend

Sam told his sister Sara yesterday that

he thinks a command economy is an

economic system used in countries like

Cuba and North Korea Sara quickly

thought about what the word command

means the word command quite simply

means to give orders therefore it's the

government that gives orders or has

power over the financial management of

the country let's look at some of the

main characteristics inherent in a

command economy one the government is in

control of the pricing of goods and

services to the government makes all

decisions for finances in the country

such as hourly rate of pay for workers

the government may even assign people

the jobs 3 since hourly rate at pay is

regulated also tending to be just enough

to survive people will tend to try and

break the rules such as sell stuff on

the black market to make more money for

the state has absolute power over all

resources 5 the command economy has

state-owned entities as well as

privately owned entities that are

controlled by the state six people in

power such as politicians give orders to

buyers sellers and investors it might

not seem like it but a command economy

does have some advantages these include

low unemployment rates due to the

regulation of jobs by the government -

everyone has access to health care

services and necessary services need to

live and usually the fee is either low

or free three decisions are made quickly

by state or government officials example

one Cuba who can forget Cuba as being a

tightly run country led by Fidel

Castro's brother Raul Castro there are

many distinctive aspects to Cuba's

command economy for example housing is

free but no one can own a home because

the government owns all houses

unemployment isn't an issue but

overcrowded public transportation is

like any can

economy salaries controlled by the

government and isn't very high and the

government has control over pricing it's

common for people to work another job

without the government knowing since

their salary is so strictly regulated

and is only enough to survive it is

against the law and if caught the person

would face punishment an example of this

is making product and selling it under

the table to other citizens Cuba has

foreign banks in the country but they

can't do business with them unsupervised

as for travel some people are not

allowed to leave the country government

officials can be seen in public areas

watching the people at all times as seen

in the following image example 2

many will find a huge similarity to the

Korean party and the party that George

Orwell's famous novel 1984 describes of

course there were people like Winston

and Julia who are against this type of

control sadly when the government

officials discovered their rebellious

behavior they were punished severely

North Korea is no different people can

be killed in front of the crowd to bring

fear to those who don't support the

state or try to escape the country it

was reported in 2015 that over 1,400

public executions have occurred since

the year 2000 they can also be put in

prison and severely abused there is even

a watch for North Koreans in China right

across the border let's look at the

details of the country's command economy

though the state is in charge of rolling

out tasks for making selling and

delivering goods it also owns natural

resources banks transportation railroads

the post office and any other

establishment related to communication

people can own items passed down to them

by their elders and regular consumables

but they're restricted from any other

kind of personal ownership of goods that

are produced corruption is obviously

common due to the limited freedom people

have the government controls all

international trade and this has

resulted in very little support from the

international community example three

Nazi Germany let's not forget one of the

most well known command economies of all

time run by Adolf Hitler in the early

1930s

Hitler ran a command economy finances

job selection citizenship and trade was

run by the Nazi government people even

had to record the leisure activities

that they were forced to do men had to

serve in the army while the government

chose the jobs for the people if they

didn't like it they were put into

concentration camps anyone who didn't

obey the Nazi rule was put there

unemployment rates did drop a lot but

people lost their freedom to pick up the

jobs they wanted let's review a command

economy

an economy in which the government has

the power over the financial management

of the country Cuba North Korea and Nazi

Germany are three good examples of

countries which have command economies

there are some advantages to a command

economy and these include one low

unemployment rates due to the regulation

of jobs by the government too everyone

has access to healthcare services and

necessary services needed to live and

usually the fee is either low or free

three decisions are made quickly by

state or government officials