Amadeo 1: Definition

• Central government males all economic decisions for their country.
• Government owns all land and the means of production.
• Government does not rely on the laws od supply and demand that most countries that operate in a market economy.
• Mixed economy better achieves goals for a particular country.

Amadeo 1: 5 Characteristics 

• The government creates a central economic plan for the regions of the country.
• It allocates all the resources that are in the central plan.
• The plan eliminates unemployment by telling to use the person's skills and abilities to their highest capacity.
• Plan uses the priorities of the all the goods and services.
• Government uses monopoly business.
• Government creates laws, regulations, and directives to to put the central plan into action.

Amadeo: Command Economy Advantages

• Mobilizes economic resources, can execute massive projects, and also meet the people's goals.
• Can transform societies, but the transition is violent.
• To the government's assessment of the workers' skills, the workers were to be assigned to new jobs.

Amadeo: Common Economy Disadvantages 

•  Rapid mobilization leads to mow down other social needs.
• Command can often produce too much of one thing and putting the same focus on another thing.
• Is not good at stimulating innovation.
• Command also has trouble producing the right exports for the global market prices
• Meeting the prices and needs of the international markets is too complex.

Amadeo: Command Economy Examples pg. 2-3

• Belarus- Soviet Satellite; government owns 80% of the countries' businesses and 75% of the countries' banks.
• China- Current leaders of China are moving toward a more market- based system, but still create a 5- Year Plan to prioritize economic goals and objectives.
• Cuba- this country installed a Communist political system and planned economy. Government is slowly incorporating market reforms to spur growth.
• Iran- Government controls almost 60% of the economy through the state-owned businesses. created recessions.

Amadeo: Command Economy Examples pg. 3

• Libya- Muammar Gaddafi introduced this economy which he thought was reliant upon the country's oil revenues.
• North Korea- President created the world's most centrally planned economy.Resulted in food shortages, malnutrition, and mass starvation.
• Russia- Lenin overthrew the Czars and created the Communist command economy. 
• Cuba- This country installed a Communist political system and planned economy.

Amadeo         pg.3   Command Economy Examples

• Iran- Government controls 60% of the economy through state-owned businesses. Uses price controls and subsidies to regulate the market.
• Libya- Used command economy to be reliant to oil revenues for other countries.
• North Korea- President Sung II created the world's most centrally planned economy. Resulted in food shortages, malnutrition, and several bouts of mass starvation.

Amadeo      pg. 3      How the Theory Was Developed

• Otto Neurath developed the concept of a command economy to control the hyperinflation after World War I.
• Centrally planned economies existed long before then. Included Incan Empire, the Mormons in the 19th century, and the United States during World War II mobilization.