In a command economy, the government decides what goods and services will be produced and what prices it will charge for them. In the last century, communism emphasized command economies. In return, vassals provided labor and soldiers to do the lord’s bidding. Medieval manor life is another example: the lord provided the land for growing crops and protection in the event of war. Ancient Egypt was a good example: a large part of economic life was devoted to building pyramids, like those in Figure 1.8, for the pharaohs. In a command economy, economic effort is devoted to goals passed down from a ruler or ruling class. (Credit: "Pyramids at Giza" by Jay Bergesen/Flickr Creative Commons, CC BY 2.0)Ĭommand economies are very different. Because tradition drives the way of life, there is little economic progress or development.įigure 1.8 A Command Economy Ancient Egypt was an example of a command economy. Most families are farmers who grow the crops using traditional methods. Traditional economies organize their economic affairs the way they have always done (i.e., tradition). The first is the traditional economy, which is the oldest economic system and is used in parts of Asia, Africa, and South America. There are at least three ways that societies organize an economy. Who organizes and coordinates this system? Who ensures that, for example, the number of televisions a society provides is the same as the amount it needs and wants? Who ensures that the right number of employees work in the electronics industry? Who ensures that televisions are produced in the best way possible? How does it all get done? The economic life of every individual is interrelated, at least to a small extent, with the economic lives of thousands or even millions of other individuals. It includes all production of goods and services, all buying and selling, all employment. Think about what a complex system a modern economy is. Assess the importance and effects of globalization.Contrast traditional economies, command economies, and market economies.By the end of this section, you will be able to:
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |