1. Centrally Planned Economies

2. the working classes to take control of the rewards of their labor
Brief Definition
All economic decisions are made by the government to ensure the equality of access to goods and services.
Goals
the working classes to take control of the rewards of their labor
even distribution of wealth amongst the people
take down the practice of capitalism
Theory vs. Reality
In theory: workers own all means of production.
Reality: the government owns ALL aspects of the economy and country.

3. II. Historical Background
Began with Enlightenment ideas: people having natural rights and liberties.
These ideas were revisited during the Industrial Revolution and the drastic income inequality that resulted.
Rich: mill owners vs. Poor: people who worked in the mills

4. Karl Marx and Frederick Engels write the Communist Manifesto in 1848.
Every society is built on an economic base, which determines social classes.
Marx believed that there would be a constant class struggle between rich & poor, workers & owners, haves & have-nots as long as capitalism runs the economy.

5. If you want to change a society, you need to change its economy.
How? Violent revolution: the workers would unite together and overthrow the owners, take over the business, and distribute the profits and wages evenly communism is born.
How does it work?
“From each according to his ability; to each according to his needs.”

6. III. Characteristics of a Command Economy
Government controls all aspects of the economy and life
Overall lack of incentives
All jobs were guaranteed. All wages were set by the government.
All goods produced were to meet a government quota.
What happens when you meet the quota?
Shortages of all goods and services were everywhere.

7. d. Problems
Poor quality of goods & services
Shortages
Inefficient labor force
No incentives
Lack of market Prices were not flexible (this would cure shortages and surpluses) and did not reflect needs and wants of people.
Bureaucracies were too expensive to run
Societal goals were put over individual goals and freedoms