Command Economies

This is the flag of the Union of Soviet Socialist Republics (USSR)

Why do you think they chose the hammer and sickle as their symbol?

Command Economies

Use the slips to estimate how much of each item you eat in 1 year.

(Think about how much you would need for 1 day, then multiply by 7 (days), then multiply by weeks (4 weeks per month), then by 12 (months per year)

Command Economies

Let’s experiment:

Try and predict how much of each item you should produce to feed the entire classroom for one year

Be careful, this food is perishable and if you produce too much the food will spoil.

Conversely, if you produce too little, people will starve and die.

What you just did

• You tried to centrally plan the economy

• What happened to our village?

Command Economies

Based on the ideas of Karl Marx (1818-1883)

German Economist

Lived in England

First Sociologist

Industrial Revolution

Command Economy Philosophy• Produce needs, not wants• Make needs as close to free as possible• Treat workers better (safe, high wages,

benefits)• No private property• Economic equality• Central planning of production• No entrepreneurs

Benefits of economic system?Problems with economic system

USSR

• 1917-1991

• Tried experiment with communism– Communism =

command economy with restricted rights.

“Bread Lines”

Command Economies today

• Cuba

• North Korea

• China (sort of)

• Laos

• Cambodia

• Communist parties around the world Communist rally in France, 2007

So what about Socialism then?

Socialism = many economic rules (fewer rights)

Price controls

High taxes

Cheap or “free” healthcare education

Safety for workers

Democratic

A Range of Economic systemsDepends on Economic Rights

Free Market Mixed Command

Hong Kong

Germany

France

Sweden USSRCubaNorth Korea

Dubai