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A '''command economy''' is an system in which [[government]], not the [[free market]], guides and plans [[business]] activity.

A '''command economy''' is an economic system in which a central authority, usually a [[government]], has the power and responsibility to make all economic decisions.

Examples include [[Communism]] and [[Fascism]]. [[Nations]] with [[Free Market]] economies sometimes institute command economies in time of [[War]], for example the [[United Kingdom]] in [[World War II]]. The heavily regulated economies of the [[Euro]] zone have evolved into de facto command economies.

The most undisputable examples of command economies are those countries where the government owns all businesses and enterprises (these are usually communist countries). However, there have also been a number of countries where business remained private but business owners were in some way or other subservient to the government (for example, some fascist countries, and some democratic countries as well, particularly in times of [[war]]); it is not clear whether these can also be called command economies.

Command economies can be less wasteful than the free market but also tend to stifle [[freedom]] and [[creativity]]. Economic stability becomes more important than innovation, as the [[minister]]s buy off their constituents with continued [[employment]], and the whole structure comes crashing down when it is unable to adapt to changes in the availability of [[natural resources]] and in [[demand]].

Command economies can be less wasteful than the free market but also tend to encourage conformity and standardization instead of experimentation and creativity. Often, in a command economy, economic stability becomes more important than innovation. For instance, many command economies eliminated unemployment and gave everyone a job, but encouraged people not to seek to improve their condition. As a result, a great number of the world's command economies were dismantled in the early 1990s due to changes in the availability of [[natural resources]] and in [[demand]].

[[Category:Economics]]

[[Category:Economics]]