A command economy is a type of economic system where a central government or authority makes all economic decisions, and the state owns most of the means of production and distribution. It is the opposite of a market economy, where individuals and businesses make their own decisions and the state has a limited role in the economy. In a command economy, the government has complete control over what is produced, how it is produced, and who gets it. As such, a command economy has certain restrictions on what is allowed and what is prohibited.
Prohibited in Command Economies
In a command economy, the government has the power to prohibit certain activities or forms of economic behavior. These restrictions are put in place to ensure that the government’s economic policies are followed and that the state’s control over the economy is maintained. Some of the activities that are prohibited in a command economy include:
What Is Not Allowed?
- Private ownership of businesses and property: In a command economy, the state owns all businesses and property. Private individuals and businesses are not allowed to own or control any part of the economy.
- Market-based pricing: In a command economy, the government sets all prices for goods and services. This means that market forces, such as supply and demand, do not determine the prices of goods and services.
- Private foreign trade: In a command economy, the government controls all foreign trade. Private individuals and businesses are not allowed to engage in foreign trade.
- Private production and investment: In a command economy, the government controls all production and investment decisions. Private businesses and individuals are not allowed to produce or invest in any goods or services.
- Free enterprise: In a command economy, the government controls all economic activity. Private businesses and individuals are not allowed to operate independently and freely pursue their own economic interests.
A command economy is a type of economic system where the state has complete control over the economy. This type of economic system has certain restrictions on what is allowed and what is prohibited. Some of the activities that are prohibited in a command economy include private ownership of businesses and property, market-based pricing, private foreign trade, private production and investment, and free enterprise.
