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.