Central Planned Economies

The Central Government, rather than the individual, answers the key economic questions. Government decides what to produce, how to produce it, and who gets what Government owns land, labor, and capital

Socialism Social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout society. Political equality must be coupled by economic equality Requires a high degree of central planning to achieve economic equality

Communism Centrally planned economy with all economic and political power resting on the hands of the central government Communist governments are authoritarian, usually run by a single political party or a dictator

Soviet Union Most well known communist government Government controlled all agriculture, industry and consumers Problems Poor quality More focus on quantity Shortages of goods Diminishing production

More problems Systems can not meet consumers needs or wants Workers lack incentive Sacrifice individual freedoms in order to pursue societal goals