What defines a command economy?

A command economy is characterized by significant government control over production and distribution decisions. In such an economic system, the government typically determines what goods and services will be produced, how much will be produced, and the prices at which they will be sold. This contrasts sharply with market-oriented economies, where individual businesses and consumers make decisions based on supply and demand dynamics.

The rationale for a command economy often revolves around the idea that centralized planning can facilitate more equitable distribution of resources, avoid the inefficiencies that can arise from market competition, and achieve specific societal goals that may not align with profit motives. This approach allows the government to direct resources toward sectors deemed important for economic growth or public welfare.

In a command economy, any deviations from this model, such as decentralized decision-making, market-driven pricing, or free market competition, would not occur, as these are characteristics of market economies where consumers and businesses have more autonomy in economic activities.