Purpose of Command Economy
A command economy is usually set up to achieve political, social, or moral goals. The government makes most of the choices about economic planning, allocating resources, and production in a command economy. These are some common reasons why a command economy is used,
1. Social Equality: One of the main goals of a command economy is to make everyone fair by reducing differences in income. The goal of the government taking over important industries and resources is to make sure that everyone has the same amount of money.
2. Centralized Control: Putting all the power in one place: A command economy tries to give the government all the power over the business. This lets the government control production, set prices, and decide how to use resources based on what’s best for the country.
3. Common Welfare: Most of the time, the main goal is to support the well-being of society as a whole, not just individual interests. The overall health and happiness of the people are taken into account when making decisions, with a focus on meeting basic wants and making sure everyone has a certain level of living.
4. Strategic Planning: This type of economic model can help governments in command economies plan ahead and give priority to areas they see as important for national growth. This could mean putting money into infrastructure, schools, hospitals, and other important places.
5. Reduced Risk of Exploitation: Command economies are meant to reduce or get rid of what people see as the unfairness that comes with economic systems. The government wants to keep wealth from getting concentrated in the hands of a few people by taking away private control of the means of production.
6. Stability and Predictability: Command economies can help make economic planning more stable and predictable. The government can set long-term goals and targets that give the economy a feeling of direction.
7. Economic Security: A command economy is one way for governments to make sure the economy is safe, especially during times of trouble. When there is centralised planning, resources can be put to use to deal with problems like wars, natural disasters, or economic downturns.
8. Control Over Resources: The government has control over land, natural resources, and big industries. This lets it decide how to use resources based on what the government thinks are the most important things for the country. This power includes choosing what to make and how much to make.