A command economic system, also known as a planned economy, is one where the government or a central authority makes all major decisions about the production and distribution of goods and services. Various countries have adopted command economies, especially during the 20th century.
Countries that are often cited as having command economic systems include:
- Cuba: Still operates under a centrally planned economy where the government controls most industries and the majority of goods are produced and distributed by state enterprises.
- North Korea: Maintains a strict command economy where the government dictates all economic activity, with significant restrictions on private enterprise and individual ownership.
- Venezuela: Has implemented numerous state control measures over the economy, particularly in the oil sector, and has tightly regulated prices and controlled production.
- Former Soviet Union: Although it no longer exists, the Soviet Union was the most prominent example of a command economy, where the state was involved in all aspects of economic planning and production for decades.
In these countries, the government often focuses on meeting specific goals and objectives, often prioritizing social welfare over market efficiency. While this can lead to certain advantages, such as universal access to basic needs, it also tends to result in inefficiencies and shortages, as there is less room for competition and innovation.