SOCIALIST economy is a planned economy. The entire national economy in socialist society develops in a planned and proportionate way. This is the objective law governing socialist economic development and an important feature showing the superiority of the socialist economy over the capitalist economy.

The United States has a mixed economy. It works according to an economic system that features characteristics of both capitalism and socialism.

Mega-companies like Amazon and Walmart are already using large-scale central planning. Socialists need to renew our embrace of democratic planning and fight for a real alternative to capitalism. …

The goal of such an economic system would be to achieve conscious control over the economy by the population, specifically so that the use of the surplus product is controlled by the producers. The specific forms of planning proposed for socialism and their feasibility are subjects of the socialist calculation debate.

In a planned economy, the government decides what gets produced, at what quantity and what price. The state-owned as well as the private enterprises in such economies receive guidance and directives from the government regarding economic problems including what to produce, how to produce and for whom to produce.

In a planned economy, resource allocation is determined by a central authority (usually the government) rather than by demand and supply. This is normally practised in socialist countries such as North Korea and Cuba. The central authority determines the quantity of goods and services produced in the economy.

Lack of coordination – In centrally-planned economies, planners try to coordinate the economic decisions about production, consumption, investment and savings of all producers and consumers throughout the country. This led to gluts in production and shortage of some goods.

Cuba, North Korea, and the former Soviet Union are examples of countries that have command economies, while China maintained a command economy for decades before transitioning to a mixed economy that features both communistic and capitalistic elements.

Planned Socialist Economy In socialism, planning refers to production of use-value directly (planning of production), while in capitalist mixed economies,planning refers to the design of capital accumulation in order to stabilize or increase the efficiency of its process.

A planned economy relies on a centralized government or authority to make all economic decisions.

This is also sometimes referred to as a planned economy. Since decision-making is centralized in a command economy, the government controls all of the supply and sets all of the demand. Prices cannot arise naturally like in a market economy, so prices in the economy must be set by government officials.

The government makes all decisions on the three key economic questions in a centrally planned economy. Why do centrally planned economies tend not to be efficient? The government owns all production factors. Since the government fixes wages, workers lack the incentive to work faster or produce more.

Who benefits and who suffers most from a centrally planned economy? How? Government officials benefit because they can favor themselves; ordinary people suffer from lack of freedom and choices. How does the U.S. government protect private property?

Command economy advantages include low levels of inequality and unemployment, and the common good replacing profit as the primary incentive of production. Command economy disadvantages include lack of competition and lack of efficiency.

The government decides what to produce and when. Basically, the government is in full control of the economy. What does a centrally planned economy oppose that a market economy encourages? The centrally planned economy opposes private property, free marketing pricing, competition, and consumer choice.

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