Economic Systems Vs Command Economies

In advanced economies there are various ways to deal with the question of scarcity. Different countries use different approaches or types of economic system.

Arguments about the merits of markets and planning proceed at different levels. For example, opponents of the market system are often found really to be attacking ‘capitalism’. Private ownership of the means of production leads, they claim, to an inequitable distribution of income and wealth and to the exploitation of labor by the capitalist class. That was the basic thinking of Karl Marx in his monumental work. (Capital, 1867)

The world’s economic systems divided into four main categories. There are traditional economy, market economy, command economy and mixed economy; anyhow, there are boundless variations of each

In command economies, no one can gain more than any other. Everyone is place at equal levels, which abolish gluttony from the society.

 Price Control

Price swelling is a big reason for prices being huge in many countries. The government manage and sets the prices of all goods that are produced and sold in the country.

• Disadvantages of a Command Economy

 Production Is Unbalanced

 Economy over Society

 High Crime Rates/Black markets

Have a way of coming into existence wherever wants are unsatisfied, and if you are willing to pay, someone will find a way of supplying what you want.

 Lack of investment

 No incentives to productivity

There were no rewards for over filling plan, only penalties for under filling it. Here it is necessary to cut costs and raise output per person in order to complete, and those who can achieve this are awarded.

 Wastage of resources

Inevitably a planned economy needs to divert resources into planning, rather than actually producing.

Examples of modern day command economies:

 China

 Cuba

 North Korea

 The Soviet