Command Economy Essay Example

My paper is based on observation of Iran control of the economy. Iran government controls about 60% of the economy mainly through businesses that are owned by the state. The government utilizes subsides and price controls in regulating the market. While this strategy cannot be classified as pure communism, the government regulations and control means the government is the primary driver of the economy not only through trading and management of business but also through policies. One disadvantage of this mode of intervention is that if the government fails, the entire country economy might crumble. This was the case in Iran during the economic recession. The government as the leading player of the economy ignored the recession and subsequently made inappropriate decision to devote resources to enhance the nuclear investment creating more problems when the UN placed sanctions to Iran. The Nation's economy only improved when the sanction was removed in 2015 allowing Iran government trade to with other nations (Amadeo). The main problem, in this case, was due to the government monopoly in businesses allowing private sector minimum role in areas such as input in decision making concerning the economy of a nation.

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The issue in this paper is a command economy. Command economy is also known as command economy refers to situations where the central government decides on all financial and economic resolutions. The government possesses virtually all resources such as land as well as the means of production. The government also controls the goods to be produced and attach a price to the goods. Although private production may exist, the government controls what they produce, how to produce and assign a price to the products; moreover, the government owns part of the private sectors by holding vast resources used by the private sector including land and raw materials. Command economy is a major feature of communist society and sharp contrast of the free market where the government does not interfere with the private sector by setting prices to their benefits, control production and hamper competition from the private sector and as a result, the government becomes the dominant player in the economy. The government subsequently gains control of all main business through the elimination of competition. Another main characteristic of this form of economics is that it sets the nation's priorities such as when to go to war, when and how to embark on economic growth among other significant decisions (Martin 79).

Conclusion

The command economy phenomenon fits well with the case of Iran where the government controls vast of the economy. The government makes the majority of economic decisions such as in the case where they decided to boost the economy by engaging in nuclear production. Their decision also means that they control which goods to be produced and when to be produced. Iran is one of the countries accused of denial of democracy to the citizens. Hampering of private business to eliminate competition is one f the forms the government uses to dominate the economy. Command economy sets the majority of the nation's priorities including major economic policies. Whereas some of the priorities are usually right, some of them are wrong and might result in economic downfall. This was the case in Iran when they started nuclear production as a means of enhancing their economy; however, it resulted in a deteriorated economy as they became sidelined in business.

Works Cited

Amadeo, Kimberly. Command Economy, Its Characteristics, Pros, and Cons; Five Traits of a Command Economy. The balance, 21 September 2018. https://www.thebalance.com/command-economy-characteristics-pros-cons-and-examples-3305585. Accessed 17 October 2018.

Painter, Martin, "From Command Economy to Hollow State? Decentralization in Vietnam and China." The Australian Journal of Public Administration, vol. 67, no. 1, (2008), pp. 79-88.