Command Economy Definitions Command economy government owns the

Command Economy

Definitions • Command economy: government owns the means of production and controls the distribution of goods – Government owns/in charge of land, labor, machines, factories, and business managers – Government is in charge of making sure people get the things that were produced – Government tries to distribute (give out) things equally and fairly – Two types: Communism or Socialism

Communism • One political party is allowed: The Communist Party • The government controls and owns everything • Ideally, this is a GREAT idea… in the real world, however, it always turns out horribly – People are limited in their choices – People don’t innovate or invent new things – People don’t work very hard – People often try to leave these countries to go to countries with market economies…why?

Socialism • Think: Communism Lite • People can still elect their own leaders and more than one political party is allowed, but the government has a bigger role than in a market economy • Redistribution of Wealth: not exactly take from the rich and give to the poor (Robin Hood? ), but take from all income and provide services to all • 3 Main Goals: – Money and economic opportunity are fairly distributed – Society (through the government) controls decisions about things the public owns – Public ownership of services and factories that are essential (like hospitals)

What Does Socialism Look Like? • Western European (England, France, Finland, Germany, etc) countries tend to be Socialist • High taxes (to pay for the services they provide) • Government provides free or VERY cheap: hospital visits, childcare, education, public transportation, etc. • Public doesn’t get to pick and choose which of its taxes goes to which program, except when they vote, so… • Very active politics (lots of protests in the streets!) • Why is “socialism” a dirty word in America?