A planned or command economy is one in which major functions, such as production and distribution of goods, are controlled by the government. In a planned economy, the government owns some or all production facilities and decides what to produce and how goods are priced. This is in contrast to a market economy, where production and distribution are decided by market forces with little or no government intervention.Know More
The advantages of a planned economy include the ability to set goals, such as full employment. Proponents of this type of system argue that a command economy benefits the entire society rather than a fortunate minority. Disadvantages include a disconnect between which goods are produced and what is needed. Command economies tend to have decisions made by bureaucrats who are out of touch with the market. This type of government tends to dismiss individual rights in order to achieve societal goals. Some countries, such as the former Soviet Union and China, which formerly had planned economies, have transitioned to a mixed economy.
In a hybrid or mixed system, the government allows some privatization of the means of production and deregulates pricing so that market forces play a role. In reality, most economic systems are mixed, with varying degrees of government intervention.Learn More
A command economy can be advantageous by eliminating unemployment but can also be a disadvantage by producing unnecessary products. A command economy is when the government owns all or most aspects of the economy. The government chooses what goods and services to provide.Full Answer >
Poverty compromises the market's access to skilled labor which is essential for production of needed goods and services. Poor people lack access to good health care, which presents challenges in workforce productivity. The economy also spends more on health care for people who can’t afford it. Further, poverty poses greater demands for the criminal justice system, which reduces productivity of those incarcerated and results in property damage for those affected.Full Answer >
A mixed economy is comprised of private and publicly owned businesses that are regulated by governmental organizations. In mixed economies, such as the United States, the government is responsible for using laws to control or break up business monopolies.Full Answer >
A traditional economy is an economic system where customs, traditions and beliefs determine the goods and services created by the society. It is dependent on agriculture, hunting and gathering, fishing or any combination of the above. Also called a subsistence economy, it may involve use of barter trade instead of currency.Full Answer >