Video: Commanding the Economy

Command Economy

How does a command economy work?

A command economy is a system where the government makes all of the economic decisions for the country.

It basically gives orders that its citizens must follow.

The government is centralized and determines what to produce, how to produce it, whom to produce it for, and how much it will cost.

The goal is to use the nation’s money, labor, and natural resources in the most efficient way possible.

In a command economy, the government owns most of the property. Even privately owned businesses are controlled by the government.

It also determines where people live, where they go to school, and what doctor they see.

The government in a command economy determines what jobs people have and the wages, or how much money they make.

Some people make as little as 40 cents per month. Some people make as much as $40 per month. Either way, that isn’t a lot of money to live off of each month.

In a command economy, the government claims it makes decisions that benefit the citizens, like free or cheap housing, education, and healthcare, but that comes at a price.

Even though it may be free, or affordable, people may have to live in dangerous or unhealthy environments.

They may not have enough food to eat and lack the necessities for survival.

The government focuses on its own needs before the needs of its people.

For example, if the government felt threatened, they may put more money into building weapons and training its military.

Because of this, less focus (and money) is put towards the needs of everyone else not in the military.

People will make less, eat less, and have less.

So living in a command economy isn’t always the best for its citizens.