The Command Economy System
Economic is a system that uses production, distribution, and consumption goods and services to create a stable environment for a country or nation. Economics is important for many areas of society. Economics is important for our society and us. It can help in improve living standards and make society to a better place. Economics is like science, it can improve living standards but it also will make things worse.
In this assignment, we will discuss about the pure capitalism and communism economy system fail to become the dominant economy system in today economy.
Economic system, a system to resolve the basic economic problem. There are some economic system for our economy. Capitalism, communism and the mixed economic system is the economic …show more content…
This system is under the control by the government or state. But in today situation, this system is not suitable for major country and only few countries still remain with this system. There are some reason why the major country does not adopt the command economy system.
The economy under this system is fully controlled by the government or central planner. Therefore, there is no freedom and choice for the consumer or producer. They have been controlled in what to buy and what to produce. The government plans everything.
The government or planner will try to coordinate the economic decision on trade, investment, production and consumption of the consumer and producer in their country. One of a reason causes this system failure is the coordination. The plan is impossible to done with efficiency and there is also a problem occur in goods does not enough for the demands and needs of people in the country.
The shortage of resource problem cannot be completely resolved by the planner. For example, there is a shortage of supply food but have good supply of television. This show that the unbalance resource allocated divided by the government or planner. When the country needs is not the want of the people, there will occurs some conflicts of …show more content…
This show that the planner does not give the right goods and service to their people.
However, there will happen some shortages when there are some changes occur because the system is rigid. There is a lot of wastage in manpower because major of people are need to plan by the central or government. The steps of official are too many and there is also a lot unnecessary procedure and paperwork required. The misplaced incentives problem occur because the plans by the planner will causes worker does not have choice for their work and no motivation in their work. For example, the manager is lack of motivated and worker will low morale and efficiency because there is no incentive for them.
Lastly, because the disadvantage of this system. Some country that used to adopt this system has transformed to mixed economy system. For example, the former Soviet Union demolished their economies system from 1990, China start to transformed when during 1980s and 1990s, Cuba until the 1990s and only North Korea until today still adopted this
In this assignment, we will discuss about the pure capitalism and communism economy system fail to become the dominant economy system in today economy.
Economic system, a system to resolve the basic economic problem. There are some economic system for our economy. Capitalism, communism and the mixed economic system is the economic …show more content…
This system is under the control by the government or state. But in today situation, this system is not suitable for major country and only few countries still remain with this system. There are some reason why the major country does not adopt the command economy system.
The economy under this system is fully controlled by the government or central planner. Therefore, there is no freedom and choice for the consumer or producer. They have been controlled in what to buy and what to produce. The government plans everything.
The government or planner will try to coordinate the economic decision on trade, investment, production and consumption of the consumer and producer in their country. One of a reason causes this system failure is the coordination. The plan is impossible to done with efficiency and there is also a problem occur in goods does not enough for the demands and needs of people in the country.
The shortage of resource problem cannot be completely resolved by the planner. For example, there is a shortage of supply food but have good supply of television. This show that the unbalance resource allocated divided by the government or planner. When the country needs is not the want of the people, there will occurs some conflicts of …show more content…
This show that the planner does not give the right goods and service to their people.
However, there will happen some shortages when there are some changes occur because the system is rigid. There is a lot of wastage in manpower because major of people are need to plan by the central or government. The steps of official are too many and there is also a lot unnecessary procedure and paperwork required. The misplaced incentives problem occur because the plans by the planner will causes worker does not have choice for their work and no motivation in their work. For example, the manager is lack of motivated and worker will low morale and efficiency because there is no incentive for them.
Lastly, because the disadvantage of this system. Some country that used to adopt this system has transformed to mixed economy system. For example, the former Soviet Union demolished their economies system from 1990, China start to transformed when during 1980s and 1990s, Cuba until the 1990s and only North Korea until today still adopted this