A centrally planned economy is characterized as an economic system in which the government dictates and regulates all areas of economic activity, such as trade, labor, distribution, production and health care. A centrally planned economy is also known as a command economy.Continue Reading
Centrally planned economies demand that citizens submit to the government for the benefit of the state. In a centrally planned economy, the government controls a nation's supply, pricing and the manufacture and distribution of goods. The government owns all industrial production factories and all land. Government determines labor wages by basing them on the social benefit an occupation provides. The government decides the nation's economic goals and direction. This economic model discourages citizens from seeking profit and gain. This prevents monopolies and consumer exploitation, but discourages individual incentive.
An example of a centrally planned economy was the Soviet Union. This type of economy is commonly indicative of socialism or communism. A disadvantage of a centrally planned economy is that goods are inefficiently produced, resulting in surpluses and shortages that the government is unable to control. This economic model is generally inefficient and most governments that had attempted to establish a centrally planned economy eventually transitioned into a different type, such as a free market system.Learn more about Types of Government
According to the Library of Economics and Liberty, capitalism is based on the principle of individual rights, a free market economy, an uneven distribution of wealth and very little government interference. Communism is based on the principle of community rights, controlled economic production, an even distribution of wealth and high levels of government oversight.Full Answer >
The tertiary sector is focused on tertiary production, which is commercial services that work to provide support to distribution and production processes such as warehousing, transport services, insurance services, teaching, health care and advertising services. In the industrial world, there are three types of industry sectors: primary sectors, secondary sectors and tertiary sectors.Full Answer >
One of the strengths of Karl Marx's theories is his sociological observation that a capitalist and industrialized society can become divided by the class struggle between the owners of production and those who provide the labor required for its operation. Marx believed that the growing divide in a capitalist society could eventually reach a flash point that would result in a revolutionary process and the subsequent replacement of the previous society with a more egalitarian one. One of the weaknesses in Marx's theories, however, is his inability to adequately describe what type of workable and functioning society would replace the old one.Full Answer >
Characteristics of totalitarianism include total state control of the economy, military and news media, police who use terrorism as a tactic and rule by a single party. Some totalitarian states tortured people and committed mass murder.Full Answer >