Definition of Command Economy Examples
There are several examples of command economy according to the different situations. Command economy is a system under which the government controls everything the demand and the supply of the goods and services are owned and controlled by the government. The government decides in the economy the quantity of the goods produced in an economy rather than the private sector which is prevalent in most of the economies in the world. The command economy is similar to communism in the sector. The government, in this case, has a monopoly in the economy and the private businessmen have no control over the economy and do not play any role in the production of goods and services.
Also, all the rules and regulations are also dedicated by the government in the economy and the government basically owns everything which is operating in the economy. Also, the policies of monetary and fiscal benefits are also planned and implemented by the government. Virtually everything is owned by the government.
Examples of Command Economy
Some of the Command Economy examples are provided below:
The most common and relevant example of a command economy is the Republic of China were after world war 2 the ruler of the country of China who was Mao Tse Tueng created an economy of communism. The economy which he planned was a restricted economy with closed doors to trade and the international flow of goods and services. All the services and the production in the country were owned. However, the current fastest-growing economy is currently moving towards a much-liberated system and is opening up to another world economy at large to infuse foreign capital and investment within domestic boundaries. The country continues to make five years plan to achieve its long-term economic goals and objectives.
Another famous example of a command economy is the state of Iran where the government owns around 60% of the state business which is operating in the country. The government controls the prices of oil and other state-owned goods and services to regulate the economy. The economy was experiencing recessions lately because of the sanctions which were put by the United Nations which was eventually improved and closed in 2015 when the nuclear trade deal was exercised
Russia is also a very prominent example of the command economy. As in 1917, Mr. Lenin created in the first command economy of the world. After the break down of world war 2, the Russian economy got hit and was taken aback which took Russia some time to rebuild the economy. The Soviet state planning committee is actually the most researched and studied command economy in the world and was also the longest-running command economy in the world which is the USSR until the 1980s. Then, the state transferred ownership of the largest companies to oligarchs.
Examples of economies like Cuba and North Korea which are still in the phase of command economies of the world and the perfect examples which have not yet liberated themselves to the opening world and do not allow free trade i.e. the transfer of capital and labor freely outside their domestic territory. In economies like these, the government still owns and operates the major share of the economy in the country which could also turn into political distress and political crisis in the country.
Conclusion – Command Economy Examples
A command economy is basically where the government owns and creates everything in these kinds of economies the supply and the demand do not play a major role in the creation of determination of the prices and the commodities supplied in the economy. Here, the government owns and determines the prices of the commodities in the economy. The main advantage of the command economy is that the government can own the supply and demand for the nation’s welfare and can implement policies and economic structure faster compared to free-market and trade economies.
This has been a guide to Command Economy Examples. Here we have discussed some Command Economy Examples along with a detailed explanation. You can also go through our other suggested articles to learn more –