What are examples of government intervention in traditional, free market, and command economic systems?

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Government intervention into economics is most easily seen in a command economy. In a command economy, most of the nation's economic system is controlled by the government. In a command economy, it is not uncommon for the government to plan the economy and control production, price, and distribution. The Soviet Union would be a good, historical example of a command economy.

In a true free market economy, there would not be any government intervention. This is the idea of "laissez-faire", in which the government stays out of economics. In this economic theory, the economic system should self-regulate. Government does not regulate what is produced, how much is produced, price of goods, or distribution. Countries with capitalist economic systems, such as the United States, can be considered closest to a true free market economy; however, there is no country that has an entirely true free market. For example, in the United States the government places restrictions on monopolies and creates minimum wage laws, among other things.

Traditional economies are different from the other economies that we have examined. Traditional economies tend to be found in rural communities of developing nations. Traditional economies rely on a barter system of trading and are often based around agriculture. In a traditional economy, it is usually the case that economic decisions are based around societal needs. The needs of a society, and thus the economic decisions, may be made by tribal leaders or elders. The tribal leaders, in this case, can constitute a form of government within these societies.

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