Central Planned Economies

The Central Government, rather than the individual, answers the key economic questions.

Government decides what to produce, how to produce it, and who gets what

Government owns land, labor, and capital

Socialism

Social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout society.

Political equality must be coupled by economic equality

Requires a high degree of central planning to achieve economic equality

Communism

Centrally planned economy with all economic and political power resting on the hands of the central government

Communist governments are authoritarian, usually run by a single political party or a dictator

Soviet Union

Most well known communist governmentGovernment controlled all agriculture,

industry and consumersProblems

Poor qualityMore focus on quantityShortages of goodsDiminishing production

More problemsSystems can not meet consumers needs or

wantsWorkers lack incentiveSacrifice individual freedoms in order to

pursue societal goals