A command economy is one in which the fundamental economic questions, what, how, for whom to produce are answered by the government. Government decides where to locate economic activities, and what prices to charge for goods and services. In command economy government also controls the factors of production and makes the decisions about their use and the distribution of income. Governments makes tradeoffs and choices. Communism is one example of a command economy, socialism another. In command economy the government supports the handicapped and people with physical disabilities. They get the same benefits and advantages as any other working person, since in the command economic system they would get work. Which allows them to have a shelter, clothes and food to survive. The prices are determined by the government, where then the price determines who can purchase. For example, it may cost $1.00 to produce a loaf of bread, but the price may be set at $.25 to ensure consumers are able to afford the needed supplies. (Graph 1.1) In the controlled markets buyers and sellers exchange goods and services as determined by government. It is much easier to control in command economy. Another feature of command economic system is that in order to prevent the problems and scarcity that might occur in future the government looks ahead and foresees them.
The government doesn’t want individuals to have power over others, but therefore all people to be equal. Through that there is a sense of equality produced between people. People learn how to share goods, money, just everything . Sharing and helping seems to become very important and take place in everyday life. People help injured and people that are mentally ill and with physical disabilities. There is also no problem with unemployment, since all people have jobs and everybody is treated in equal manner in the command economy. This shows that all people have equal and same amount of income.
Since the government set the prices there is no competition in the command economy. In a command economy there is a little supply and demand. Everything is controlled by the government which does not the prices to rise up too high or to drop too low. This kind of control makes the economy much more steady and secure. The economy benefits more from the fact that sudden drops and hikes are unfamiliar. There are no legal monopolies, because the government interferes for the sake of public good. There are no individual businesses that would cause competition in the economy, that would make people want to work harder for higher wages. But since there is no individualism in the command economy, people all work equally. Since the income is equal for everyone, people don’t compete for doing better in job and getting higher income. Also having the same income, lessens jealousy of people to one another.
A command economy wants to make sure to meet everyone’s basic needs, there are no monopolies allowed, no supply and demand effects the economy, good values of equality and sharing are taught, the economy looks ahead and makes sure that there is balance in the society. It is also controlled that all people have a job and the same amount of income, and that the prices are at the rate where every single person can afford good or service they need to survive. There is no competition and the economy is easy controlled by the government. Of course it is good to have a boss in the economy, which is the government in the command economy. And for sure it is good that all people are equal, and there is no jealousy, but I think that in life there must be more risk taking, challenging, more opportunities to chose from. In life there must be satisfaction of unlimited wants for yourself. I think that in order to live a good life, you also want to achieve something, to be someone, to deserve to be what you are and to be proud of yourself.
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