A command economy is a type of economic system in which all economic decisions are based on a central government’s orders. This type of system is based on the principles of collectivism, such as economic equality and the public ownership of the means of production, so private ownership of property is typically prohibited.

What Is Prohibited?

In a command economy, private ownership of property is prohibited because all economic decisions are made by the government. This means that individuals or businesses cannot own land, buildings, or other forms of physical property. Additionally, the government often sets prices for goods and services, so businesses cannot set their own prices. The government also typically sets production targets for businesses, so they cannot independently decide how much to produce. This system is designed to achieve rapid economic development, but it can also lead to shortages and inefficiencies.

How Does This Affect the Economy?

The lack of private ownership of property can lead to inefficiencies in the production of goods and services. Without the ability to set their own prices, businesses cannot compete in the marketplace. Additionally, the government’s control over production targets can lead to shortages of certain goods if the targets are set too low. Finally, the lack of private ownership of property can lead to social inequality, as individuals have no way to increase their wealth through ownership.

Conclusion

In a command economy, private ownership of property is prohibited and the government sets prices and production targets for businesses. This system can lead to inefficiencies in production, shortages of certain goods, and inequality. Therefore, it is important to ensure that the government’s decisions are driven by the needs of the people, rather than by political or ideological motivations.