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GROWTH RATE OF PRODUCTION: The percentage change in (usually real) gross domestic product from one year to the next. This is used to indicate the degree of progress or economic growth of an economy.
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                           COMMAND ECONOMY: An economy in which the government uses its coercive powers to answer the three questions of allocation. This is the real world version of the idealized theoretical pure command economy. While in this real world version some allocation decisions are undertaken by markets, the vast majority are made through central planning. A command economy is one in which government commands (directs, orders, or dictates) the vast majority of resource allocation decisions. The contrasting economic system is a market-oriented economy, in which resource allocation decisions are achieved primarily through voluntary market exchanges.To achieve the allocation in absence of market exchanges, command economies make use of central planning. While central planning exists to some degree even in market-oriented capitalist economies, the level of detail needed in command economies is extensive. Every input, every output, every intermediate good, every worker, every resource is allocated based on a predetermined plan. Such planning is inherently less flexible and less efficient than markets. The two most notable command economies of the 20th century were the communist/socialist economic systems of China and the Soviet Union. Other countries in eastern Europe, Asia, Africa, and Latin America also had various forms of command economies during the mid- to late-1900s. The philosophical basis of 20th century command economies can be found in the works of Karl Marx, including the Communist Manifesto and Das Kapital. These works presented the economic rationale for the decline of capitalism and the emergence of communism through the dictatorship of the proletariat, with an intermediate stage of socialism. While Marx's ultimate, utopian system of communism is totally devoid of government, the intermediate state of socialism involves extensive government control, hence a command economy. Soviet and Chinese political leaders and revolutionaries who adopted a communistic philosophy never quite made it past the intermediate socialistic, command economy stage.
Recommended Citation:COMMAND ECONOMY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 27, 2024].
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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"Nothing is a waste of time if you use the experience wisely. " -- Auguste Rodin, Sculptor
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BEA
Bureau of Economic Analisys
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