Economic Systems: United States Vs. Soviet Russia

Economic systems are the means by which a country and the government distribute resources and trade goods and services. It is a system of organizing a country's economy. There are different ways of organizing a country's economy with certain ones working better for one region but destroying another. The basic ones are mixed, market, traditional, and command economies. The United States uses a mixed economy while Soviet Russia uses command economy. They differ in how much government regulation is applied and how big of a role private businesses and consumers have.

In a command economy, the government decides on how goods will be produced and transferred throughout the economy. “The government creates a central economic plan for all sectors and regions of the country. It typically starts with a five-year plan to set the overriding economic goals. The goal of the five-year plan is to generate robust economic growth, increase production efficiency and best utilize scarce resources.” (“Kimberly Amadeo”). A mixed economy on the other hand is a blend of both command and market economy. A mixed economy is characterized by some government involvement such as regulations on companies and goods. Private enterprises are allowed the freedom to produce goods in accordance to these

The consumer has the choice of buying a product from different companies creating something. In a command economy, the government determines what will be produced, how much of it, and who it goes to. Because of this, it is more common for people living in command economies to buy and sell off of the black market in order to get the things they want. In 1921, Russia used Gosplan which built up an effective military might and quickly built up the economy after WW2 which involved creation and administration of a series of 5 years plans governing the economy however, the economic system failed. (“Olga