Command Economic System

A planned economy or directed economy is an economic system in which the state or government manages the economy. Its most extensive form is referred to as a command economy,centrally planned economy, or command and control economy. In such economies, the state or government controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income, much like a communist state. The planners decide what should be produced and direct enterprises to produce those goods.

In a command economic system, the main decision maker is the government. No person may independently decide to open and run any kind of business. The government decides what goods and services are to be produced. And the government sells these goods and services. The government also decides how the talents and skills of its workers are to be used. Supporters of planned economies cast them as a practical measure to ensure the production of necessary goods. Critics of planned economies argue that planners cannot detect consumer preferences, shortages, and surpluses with sufficient accuracy and thereforecannot efficiently co-ordinate production (in a market economy, a free price system is intended to serve this purpose). Planned economies are notoriously corrupt. Their inefficiency leads to the formation of informal social networks.

Mixed Economic System

No country has an economic system that is 100 percent communism, socialism, or capitalism. All countries today have mixed economic systems or mixed economies, with some free enterprise and some government ownership. There is not one single definition for a mixed economy, but relevant aspects include: a degree of private economic freedom(including privately owned industry) intermingled with centralized economic planning(which may include intervention for environmentalism and social welfare, orstate ownershipof some of the means of production).

For some states, there is no consensus on whether they are capitalist, socialist, or mixed economies. Economies in states ranging from the United States to Cuba have been termed mixed economies.

If the government owns and operates almost all of the nation's means of production, then that nation's economic system is called communism. China has a communist economic system. Almost all of the means of production are publicly owned-that is, owned by the government. Government planners decide the answers to the basic economic questions. Farming on private plots of land is sometimes allowed. In recent years, the Chinese government has been allowing more and more private businesses to operate.

If the government owns and operates many of the nation's major industries-such as banks, airlines, railroads, and power plants-but allows individuals to own other businesses, including stores, farms, and factories, that nation's economic system is called socialism.

Sweden is an example of a country whose economic system is often described as socialist. Most of its major industries, such as coal mining, electric power, gas, telephone, and railroads, are owned by the government. Under Sweden's national health insurance system, the people receive free medical services all their lives.

If almost all the stores, factories, and farms in a nation are owned and operated by private individuals or businesses, then its system is called free enterprise, or capitalism. The U.S. has a free enterprise, or capitalist, economic system.

Language notes:

we are tempted to say – ми схиляємось до ствердження того, що…

a long process of trial and error– довгий процес випробування та помилок

the pure market of laissez-faire system has never existed – чистий ринок системи невтручання уряду ніколи не існував

how the talents and skills are to be used –як слід використовувати таланти та навички

a degree of private economic freedom intermingled with centralized economic planning – ступінь особистої економічної свободи змішана з централізованим економічним плануванням

Vocabulary focus

Ex.1. Find the English equivalents in the text.

Засіб для виживання; виконувати завданнявиробництватарозподілу; не зважаючи на виникнення великої різноманітності; для того, щоб вирішити економічну проблему; почуття безпеки та психологічного комфорту;братидоуваги; обмежувативибірспоживачів; вільнепідприємництво; досягтиефективності; критикинеможутьзрозуміти; визначити з достатньою точністю; створення неформальної соціальної мережі; надавати дозвіл на ведення приватного бізнесу; контролювати основні сектори економіки; чистий ринок; характерні риси; структура ринкової системи; незалежно вирішувати; керувати основними галузями промисловості; отримуватибезкоштовнімедичніпослуги.

Ex.2. Give Ukrainian equivalents for the following phrases.

To present itself as; to be tempted to say; in spite of; to come into play; the essential dilemma; production and distribution; to take advantage of; to solve economic problems; to do for a living; a sense of security and psychological comfort; a greater degree of autonomy; incentives for entrepreneurs; to stand for a market economy; the dominating motive; to formulate decisions; to direct enterprises; relevant aspects; intermingled with; to be notoriously corrupt; consumer preferences, shortages and surpluses; to reach a consensus on;fail to realize.

Ex.3. Give three forms of the following verbs. Find the sentences with these verbs in the text.

Deal, make, say, come, cost, choose, see, do, find, speak, be, sell.

Ex.4.Make up adjective +noun or noun +noun collocations (there may be several variants). Give examples either from the text or of your own.

Economic, basic, scientific, profit, free, private, decision, government, scarcity.

Problem, property, system, development, enterprise, questions, motive, maker, ownership.

Model:economic system

e.g. People have made use of a variety of economic systems.

Ex.5. Match up the words on the left with the definitions on the right.

Ex.6. Choose an appropriate word or a phrase to complete the following sentences.

Decision maker, a mechanism, traditional, basic and unfinished, in the distant past, a free enterprise or laissez-faire, a sense of security, owned and operated, government, in spite of.

To an economist, economic society presents itself as __________ for survival.

In fact, __________ the appearance of great variety, it is possible to group these different economic structures into four broad categories.

In traditional societies people use methods of production and distribution devised __________.

A __________ economy does not allow for much economic growth and development as changes are very slow and there is little social mobility.

The market system of economic organization is also commonly described as __________, or capitalist system.

Traditional economy provides __________ and psychological comfort.

In a command economic system, the main __________ is the government.

All countries today have mixed economic systems or mixed economies, with some free enterprise and some __________ ownership.

Government planners decide the answers to the __________ questions.

If almost all the stores, factories, and farms in a nation are __________ by private individuals or businesses, then its system is called free enterprise.

Ex.7. Complete the following sentences with prepositions.

_____ an economist, economic society presents itself as a mechanism _____ survival.

If we look _____ the different political and social structures which exist in the world today, we are tempted to say that people have made use _____ , and are making use _____ , very great varieties _____ economic sys­tems.

Tradition decides what these people do _____ a living and how their work is performed.

A traditional economy does not allow _____ much economic growth and development.

We shall use all these terms to stand _____ a market economy.

Every person has a property right _____ his own person and his own labor, and that he can make free contracts _____ those services.

Its most extensive form is referred _____ as a command economy.

Each nation and society thus must make choices and decisions based _____ their own values.

There is not one single definition _____ a mixed economy.

Economies _____ states ranging _____ the United States _____ Cuba have been termed mixed economies.

Ex.8. Combine two parts logically to make a complete sentence.

Ex.9. Look through the text again and replace the words /phrases in italics with similar ones.

The problem of insufficiency requires answers to questions “What to produce?” “How to produce?” and “Who gets what is produced?”

In a traditional economic system tradition decides how peopleearn their daily bread.

A traditional economy doesn’t make good use of technology and there is relatively little promotion of intellectual and scientific development.

The market system of economic organization is described as economic activity undertaken by private individuals or organizations under private ownership.

The political authority has performed some economic functions.

The framework of a market system contains six major traits.

In a command economy no individual may independently set up and manage commercial activity.

Critics of command economy argue that planners cannot determine consumers’ likes.

Planned economies have a bad reputation to act dishonestly in return for money or personal gain.

In mixed economic systems intervention of government may include well-being of people and protection of the environment.

Ex.10. Translate into English:

Економічнесуспільство є засобом для виживання, де люди мають змогу виконувати завдання виробництва та розподілу.

Економічна система - це спосіб відповіді на основні економічні питання – що, як та для кого виробляти.

Проблема дефіциту потребує відповіді на питання, такі як:що виробляти, як виробляти, та хто отримає те, що було вироблено.

Традиції вирішують, як люди заробляють на життя та як виконується їх робота.

У традиційній економічній системі люди виробляють товари та послуги методами, які були винайдені в далекому минулому.

В ринковій економічній системі всі питання з виробництва та розподілу вирішують покупці та продавці на ринку.

В адмістративно-командній економічній системі держава та уряд контролюють основні сектори економіки.

Структура ринкової економіки має шість характерних рис.

Немає жодної країни, що має чисту економічну систему, яка на 100 відсотків є традиційною, адміністративно-командною, чи ринковою.

Майже всіма засобами виробництва в країні з командною економічною системою володіє уряд.