The Characteristics and Advantages of Command Economies
The basic characterstic of a command economy is the ownership and control of the means of production and of the industry by the community as a whole through the Central Government. The Government owns the resources, allocates them according to the needs of the society, decides what is produced and determines the methods of production. Buyers and sellers exchange goods and services as determined by the Government in controlled markets.
The Government provides public and merit goods because it understands that society needs to have these goods for free. The Welfare Sysytem was introduced by the socialist system, so that is tries to balance the distribution of income in the country. Socialist governments are more interested in the well-being of the whole society rather than that of a small number of people. Progressive taxation is used to try and bridge the gap between the rich and the poor. From the collection of this type of tax, the Governments funds public goods, merit goods and transfer payments. The community is believed by some to be more just and more efficient in a centralised system.
Socialism seeks to redistribute wealth and to ensure that the means of production are at the service of the whole society, so that all can benefit and none will go without. Socialism destroys the capitalist concept where the wealth is concentrated in the hands of the few, resulting in wealthy people getting wealthier, while poor people starve. Socialist economies, unlike capitalist ones, are planned well. This means that problems can be foreseen and prevented.
Socialism aims for the happiness of the general society, rather than for the glorification or gratification of the high-class or particular individuals. Many criticize the socialist system because the Government decides everything in the economy. They do not seem to understand that the Government is chosen by the society via the general elections (where applicable) to represent and safeguard the whole community. Therefore, we can say that the economy is ruled by the people themselves in socialist systems.
Socialist monopolies, where only the Government supplies a particular good or service, are caring, as the state has the interest of the citizens at heart, rather than the interest of businessmen to increase prices to make more profit. Socialis systems seek to balance the distribution of income, by offering public goods, merit goods and social security benefits to society. These Government expenses are funded by using progressive taxation, so that the high-income earners pay more in tax to cover the benefits to the poorer members of society.
In Command economies, there is more awareness on the damages to the environment and to the members of society caused by certain goods or actions, such as alcoholic drinks, drugs, cigarettes and dumping of liquid waste in the sea, which would have been promoted in a capitalist system as they generate a large amount of profits. However, for the Government, the well-being of the citizen is more important than money. The Government acts as a father (paternalism) to protect the citizen from the irresponsibility of others and from the irresponsibility of him/herself (for example through compulsory education, age restrictions on drinking and on driving). This is done by imposing sanctions to try and eliminate these negative externalities.
Socialist systems seek to have a full employment situation, and stability on the place of work. Socialism understands human rights more widely and fully, and provides for the right to work, the right to fair education, and the right to free healthcare for all.