centrally planned economy

command economy

collectivism

a method of organizing the economy to produce goods and services. Under this ECONOMIC SYSTEM, economic decision-making is centralized in the hands of the state with collective ownership of the means of production, (except labour). It is the state that decides what goods and services are to be produced in accordance with its centralized NATIONAL PLAN. Resources are allocated between producing units, and final outputs between customers by the use of physical quotas.

The main rationale underlying state ownership of industry is the view that the collective ownership of the means of production ‘by the people for the people’ is preferable to a situation in which the ownership of the means of production is in the hands of the ‘capitalist class'who are able to exploit their élite position to the detriment of the populace at large. State control of industry enables the economy as a whole to be organized in accordance with some central plan, which by interlocking and synchronizing the input-output requirements of industry is able to secure an efficient allocation of productive resources. Critics of state-owned economic systems argue, however, that in practice they tend to be ‘captured and corrupted’ by powerful state officials, and that their top-heavy bureaucratic structures result in a highly inefficient organization of production and insensitivity to what customers actually want. See PRIVATE-ENTERPRISE ECONOMY, MIXED ECONOMY, NATIONALIZATION, COMMUNISM.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

This is contrasted with a planned economy, where investment and production decisions are embodied in a plan of production.

Internal Market Economics

More important are the lack of a thorough analysis of the market in relation to a planned economy and the almost complete absence of attention to ecological problems.

Deric Shannon, Anthony J. Nocella II & John Asimakopoulos, eds, The Accumulation of Freedom: Writings on Anarchist Economics

Prices of consumer goods, which had been kept below equilibrium at the time of the planned economy, needed to increase in response to liberalization, creating upward pressure on inflation.

Economic transitions: learning from Central Europe

There have been increasing signs in recent months that North Korea virtually ditched its planned economy system and state rationing to inaugurate freer management policies under the new regime of Kim Jong-un as a way to fix its moribund economy.

N. Korean new leader''s power stable - S. Korean FM

The services and utilities that need to transcend the political and economic cycles need to be part of a planned economy.

How do we dig ourselves out? Views of the North

The debate of the relative merits of a market economy and a planned economy has a long tradition.

Economic systems and economic growth

It was the collective military and economic power of the West that got the better of the then leading centrally planned economy, USSR.

SEVEN CARDINAL SINS OF FREE MARKET CAPITALISM

On democratic reforms, Akharbach recalled that "Morocco has neither experienced the one-party system nor the planned economy."

Morocco's Secretary of State to FM meets delegation of Danish think-tank

This was almost as if they were acting in a planned economy, " said Joaquin Almunia, Commission VP in charge of Competition.

EU fines ArcelorMittal, 16 others for cartelization