Command Economy

2. Command Economy • The government makes most of the decisions for the workers. They decide what goods and services to produce, the prices of the goods and services as well as the wages the workers will be paid. • No individuals can own businesses in a command economy.

3. Traditional Economy • Economic decisions are based on customs and how they were done in the past. • Goods and services are exchanged instead of using cashing – bartering.

4. Market Economy • Economic decisions are made by individuals who decide what to produce and what to buy. • Other names for a market economy are: Capitalism, free enterprise, laissez-faire. • Individuals can start their own businesses – entrepreneurs.

5. Mixed Economy • All countries have characteristics of a free market economy as well as some government planning and control.

6. China’s Economy • The government had control over almost all major parts of China’s economy following the Chinese Communist Revolution. • Farms were reorganized into collective farms where people work together and share whatever the produce.

7. 1970 Deng Xiaoping began to reorganize China’s economy with the Four Modernization – Farmers were given more control over what to produce • Farmers were allowed to sell surplus (extra) and keep the profit. • Industry shifted from steel production to consumer goods. • Special Economic Zones were set up along the coast to encourage foreign trade. • Many Chinese people have small businesses but the government has the final say in most matters.

8. India’s Economy • About ½ of India’s population still works in agriculture using the same methods from 100 years ago (example plowing with oxen and water buffalo) • Green Revolution - The government tried to modernize agriculture production by introducing new seeds and grain, fertilizers and pesticides. • Farm production increased but so did water pollution. • These methods also are very expensive.

9. India has grown in the electronic industry (T.V., computers, software) • There is a popular movie and film industry – Bollywood • Service industries are also growing.

10. Japan’s Economy • One of the most technologically advanced economies behind the U.S. and China • Japan is able to invest more money in industry and technology because they do not need it for the military. • There is very little farmland and few natural resources. So raw materials and food must be imported. • 1/3 of Japan’s energy is supplied by nuclear power

11. North Korea’s Economy • This is one of the most government controlled economies in the world. • Command economy • The government owns all the land and factories. • Farms are organized into cooperative which are owned by the government.

12. Steel and machinery industry has built up in recent years as well as textiles. • The country is rich in mineral resources like coal and iron. • The government has spend millions on the military instead of other parts of the economy.