Command economy

A command economy is an economic system in which central authorities direct major production and allocation decisions, often through plans, regulations, and state ownership.

Central planning: The coordination of economic activity through decisions made by a central authority rather than decentralized markets. It is the main method authorities use to set output and allocate resources.
Soviet Union: A socialist federation that existed from 1922 to 1991, with a centrally planned economy for much of its history. Its planning institutions became the best-known model of a command economy.
Market economy: An economic system in which decentralized exchange and prices coordinate much production and allocation. It contrasts central directives with decisions coordinated through markets.
Economic shortage: A condition in which demand for a good exceeds its available supply at prevailing terms. Fixed prices and planning errors can leave demand persistently unmet.
Material balance planning: A planning method that matches planned supplies of inputs with planned demands for goods. Soviet planners used it to reconcile production targets across industries.
Great Leap Forward: A Chinese campaign from 1958 to 1962 that sought rapid industrialization and agricultural collectivization. Its production targets and collective organization contributed to catastrophic famine.
Mixed economy: An economic system combining market activity with government ownership, regulation, or planning. It distinguishes comprehensive command from state intervention within a market system.
Economic surplus: A quantity of a good supplied beyond the amount buyers or users seek at prevailing terms. Production targets can create unwanted stocks when they reward quantity over demand.
Five-year plan: A multiyear government program specifying economic targets and investment priorities. It turns broad central goals into time-bound production targets.
Cuban economy: Cuba’s economy, shaped since 1959 by extensive state ownership and central planning alongside limited market activity. It illustrates the persistence and adaptation of central direction outside Europe.

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