Who describes what to make in a command economy?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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First of all, the correct word for this question is “determines,” not “describes.”  In a command economy, the government determines what to make. 

A command economy is one of the three basic types of economies. In market economies, customers decide what will be made because they buy what they want and they do not buy what they do not want. Companies see this and they provide the things people want.  In traditional economies, tradition determines what is made.  People make the things that their parents and their grandparents made.

The command economy is the third type of economy.  In this type of economy, the government decides.  We have seen this in the real world mainly in communist countries.  In countries like the Soviet Union, the government decided what kinds of consumer goods would be available.  They did not let market forces decide.  Instead, the government decided what things people needed and they ordered factories to make those things.

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