advantages of command economy

What Are The Advantages Of Command Economy? 

Here we will know the advantages of command economy. Before knowing the advantages of a command economy, you should know about the command economy itself. So, a command economy means an economic system in which activity is controlled by a central authority and the means of production are publicly owned. Examples of command economy are the economies of China, Russia, North Korea, Cuba, and Vietnam. It is run with a central plan in mind. This is a central economic objective which is the aim of allocating resources and production. So, without taking too much time let’s get started and know the advantages of command economy

What Are The Advantages Of Command Economy?  

The advantages of command economy will tell you about the facts of command economy and also help to find out the type of the economy of your country. 

  1. It Creates Flexible Industrial Sector 
  2. Operation Are Consistent Within It 
  3. The Demand Of Society Can Be Met 
  4. Any Resource Can Work With Any Other Resource 
  5. Acute Demand Can Be Quickly Met 
  6. Monopolizing Is Not Allowed 
  7. The Government And Society Are Streamlined 
  8. Social Welfare Is Seen As A Priority 

Let’s know what are the benefits of command economy in detail. 

Top 8 Advantages Of Command Economy 

There are many types of economies and one of them is the command economy. It is mainly employed by communist countries. Let’s look at the advantages of command economy.

  1. It Creates Flexible Industrial Sector 

One of the affordable advantages of command economy system is it creates a flexible industrial sector. Because industries are directly operated by the government in a command economy, their resources can be applied to whatever project needs to be completed. And grace, it will create flexibility within the industrial sector.

  1. Operation Are Consistent Within It 

In the common economy, the businesses which are operating, are operating at the behest of the government. Their structure is directed by the government, so there is consistency within the operational structures of each business.

  1. The Demand Of Society Can Be Met 

The best thing about the command economy system is that here the exact demand of people can be met. Because the government will attempt to meet the exact demands that people have, it will seek to maximize its efficiency. There is less waste that occurs within the society by limiting the overproduction of items and goods.

  1. Any Resource Can Work With Any Other Resource 

Any resources can work any other resources means Apple and Samsung working together or Ford and Tata Motor Working together. Ultimately it generates plenty of employment and also makes it easier to produce products on a large scale because all resources, not just individualized business resources, are actively working to benefit society.

  1. Acute Demand Can Be Quickly Met 

In the command economy structure, the full resource of the government can become active at any given time. If an emergency occurs such as a natural disaster, then it becomes possible to meet the general needs of the population with a greater speed than in other economies.

  1. Monopolizing Is Not Allowed 

As the forces are regulated by the government, there will be no provider that is given control to set the market and rule apart from the government. Monopolizing is not present in the command economy.

  1. The Government And Society Are Streamlined 

One of the great characteristics of command economy is it streamlines the government and society. It has the capacity to transform society to be streamlined with the nation’s vision.

  1. Social Welfare Is Seen As A Priority 

In a common economy, social welfare is a major concern, where one of its overriding objectives is ensuring that maximum social welfare will take place. This structure of the economy breeds a sense of community because of the lack of income inequality.

Let’s know what are the disadvantages of command economy.

Disadvantages Of Command Economy 

The disadvantages of command economy are, 

  •  Freedom Is Restricted 
  • It Limits Innovation 
  • It Encourages Illegal Activities 
  • It Eliminates Competition 
  • It Reduces Communication 
  • It Reduces Exports 

Now, you know what are the advantages and disadvantages of a command economy.

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What Is The Main Aim Of Command Economy?

The goal of a command economy is for governments – not private enterprises – to manage country economies. In a command economy (also known as a planned economy), government central planners determine what goods and services will be produced, the amount of goods and services produced, and at what cost to the consumer.

Which Is The Best Example Of Command Economy?

The most famous example of a command economy was the former Soviet Union, which operated under a communist system. Since decision-making is centralized in a command economy, the government controls all of the supply and sets all of the demand.

Which Best Describes A Command Economy?

What Is a Command Economy? A command economy is a key aspect of a political system in which a central governmental authority dictates the levels of production that are permissible and the prices that may be charged for goods and services. Most industries are publicly owned.

Which Country Is A Command Economy?

Some examples of countries that have command economies are Cuba, North Korea and the former Soviet Union.

What Are The Goals Of Command Economy?

Proponents of command economies argue that they allocate resources to maximize social welfare, unlike in free-market economies, where this goal is secondary to maximizing private profit. Command economies may have better control of employment levels than free-market economies.

What Are The Advantages And Disadvantages Of A Command Economy Quizlet?

What are the advantages and disadvantages of a command economy? Advantages: Can quickly and dramatically change if needed by shifting resources. Disadvantages: It does not meet the demands of consumers, it does not give people a reason to work hard, and it requires a large decision-making government agency.


While reading the advantages and disadvantages of command economy you would not fully understand them. Because it is a bit complex to fully understand command economy. But by going through the above-mentioned advantages and disadvantages, you can have a good idea of how it does for a certain country and, eventually, come up with an informed decision about whether it is good for society or not. This was all about the advantages of command economy.