A COMMAND ECONOMY · COMMAND ECONOMY Many problems exist in command economies. The Problems of a...
Transcript of A COMMAND ECONOMY · COMMAND ECONOMY Many problems exist in command economies. The Problems of a...
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A COMMAND ECONOMY
In this lesson, students will identify characteristics of a command economy.
Students will be able to identify and/of define the following terms:
Command Economy
Communism
Problems of a Command Economy
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Karl Marx advocated a command
economy in his book, The Communist
Manifesto (1848).
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In the early days of the Industrial Revolution,
workers were exploited or mistreated.
Children even worked in factories.
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Sure, a few industrialists and capitalists
became very wealthy but…
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Most people worked long hours for
low wages in unsafe working conditions.
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Karl Marx encouraged workers to unite
and violently overthrow the Capitalist
class in order to create a more just
society.
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“Workers of the world unite;
you have nothing to lose but
your chains.”
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COMMUNISM
Communism is frequently referred to as Marxism.
Characteristics of a Communist Society:
• Dictatorship
• Government ownership of the Factors of Production (Land, Labor, and Capital)
• Economic Equality
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It sounds like paradise: A society where
there is no poverty, no want but…
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PROBLEMS OF A COMMAND ECONOMY
Many problems exist in command economies.
The Problems of a Command Economy:
• Workers lack incentive because all workers are rewarded equally.
• Productivity and efficiency decline.
• Innovation is not rewarded.
• Individual freedoms are sacrificed.
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Think about it!
Would you work hard if you were rewarded
The same as the lazy worker beside you?
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Eventually, the Soviet Union collapsed and
the formerly Communist republics began
to transition to largely free market
economies.
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Transition has been difficult for Russia.
A new economic perspective must be
created and previously Government-
owned factories must be privatized.
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QUESTIONS FOR REFLECTION:
• How does a centrally planned economy differ from a free market economy?
• Who was Karl Marx and what did he advocate?
• Describe a Communist society.
• What problems are created by centrally planned economies?
• Define transition.