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The Command Economy. Command economies of the world. Economic decisions are not always made by individuals, companies, families, or cultural groups. In a command economy, production and distribution are directed by one person or a small group of people who form the government.
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Command economies of the world. Economic decisions are not always made by individuals, companies, families, or cultural groups. In a command economy, production and distribution are directed by one person or a small group of people who form the government. That person or group makes all the decisions, while the rest of the society follows orders. Everyone’s job is to obey or face the consequences.
Military Spending • Some command economies are also military dictatorships. • The government of a military dictatorship is controlled by the armed forces. • A military leader makes decisions about production and distribution of goods and services. • There are several countries in Africa and Asia with this type of government. • Canada and the U.S. are considered democracies.
In many of these dictatorships people live in poverty, with little chance for education or health care. Many countries that spend heavily on their military often do not leave much for social services. There are some exceptions.
Canada at war • During the first and second world wars, Canada’s economy was temporarily controlled by the government under the war measures act. • This is because the economy needed to switch to the production of weapons and equipment. • Factories that made cars made tanks and aircraft. • Canada and other countries switched from a market economy to a command economy.
Communist economies • 160 years ago, Karl Marx introduced this new type of economic system. • Marx was the founder of communism, an economic and political system in which people would work together to produce goods and share them fairly. • Communist revolutions took place in Russia in 1917 and in China in 1949. • Today, there are five communist countries: China, Cuba, Laos, North Korea and Vietnam.
Cuba: a communist command economy • Until 1957, American companies invested heavily in Cuban sugar, tobacco, and fruit. • However, they took the profits back to the U.S.. Most Cubans were poor and could not afford an education. • Fidel Castro’s communist forces took control of the government and seized American owned businesses. • To this day, the U.S. forbids it’s citizens from visiting Cuba.
In cuba, the government decides what to produce and how to distribute goods and services. The economy struggles because it has to do without American trade and investment. Cubans live with little and deal with shortages of products. However, the government provides free education, daycare, and health care. Today, more than 95% of Cubans can read and write, and many are engineers or skilled technicians.
