STATE CONTROLLED ECONOMY

It is very common in the field of the economy that mostly free markets are encouraged in order to increase the efficiency and output of the economy. But that is not the whole reality. Besides high output, free-market economies cause high inequality, unlike a state controlled economy. The state-controlled economy is also called command economy in which the economic activities are regulated by the state. The state decides what and how will be produced and distributed among the people. It has the following advantages:

WHAT ARE THE BENEFITS OF STATE CONTROLLED ECONOMY

Low inequality: The government controls the means of production and how much the firms will pay to their labor. The state takes care of the distribution of the resources which reduces the unequal development in the society.

Low unemployment rates: In command economy state takes care of the job opportunities and wages provided to the people. A single powerful firm or an individual doesn’t decide the dynamics of the market, the state does.

Common good: Unlike the free-market economy, command economy encourages common good. Command economy sets goals which are social in nature; not for the benefits of business class. The state ensures that people live by availing all the basic resources that are necessary for everyone in the country belonging to any race or ethnicity.

 

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