Command Economy Law and Legal Definition

Command economy is an economic system in which the economic activity is controlled by the government. The means of production are publicly owned. In a command economy supply and price are regulated by the government rather than market forces. The government supplies raw materials to productive enterprises and assigns quantitative production goals. The central government controls industry in such a way that it makes all decisions regarding the production and distribution of goods and services. The government directs the economy in accordance with national and social objectives. It is also called a planned economy. Former soviet union is an example for command economy.