Compare and contrast command market and mixed economies.

Command Market Economy:

A command market economy, also known as a planned economy or a centrally planned economy, is an economic system in which the government has complete control over the allocation of resources and the production and distribution of goods and services. In this system, the government makes all the economic decisions, including what to produce, how much to produce, and how to distribute the produced goods and services.

In a command market economy, the government owns and controls the means of production, such as factories, land, and natural resources. The government also sets the prices of goods and services, determines wages, and decides on the distribution of income and wealth. The main goal of a command market economy is to achieve social and economic equality by ensuring that resources are allocated based on the needs of the society rather than on individual preferences or market forces.

Mixed Economy:

A mixed economy is an economic system that combines elements of both a command market economy and a market economy. In a mixed economy, the government and the private sector coexist and play significant roles in the allocation of resources and the production and distribution of goods and services.

In a mixed economy, the government intervenes in the market to regulate and control certain sectors or industries, such as healthcare, education, and infrastructure. The government also provides public goods and services, such as defense and law enforcement, which are not efficiently provided by the market alone. However, the private sector is allowed to operate freely in most sectors, and individuals and businesses have the freedom to make economic decisions based on their own self-interest.

Comparison:

1. Resource Allocation: In a command market economy, the government determines how resources are allocated, whereas in a mixed economy, both the government and the market play a role in resource allocation. The government in a mixed economy may intervene to correct market failures or promote certain social objectives.

2. Ownership: In a command market economy, the government owns and controls the means of production, while in a mixed economy, ownership is a combination of public and private. The government may own certain industries or sectors, but private individuals and businesses also own and operate a significant portion of the economy.

3. Economic Freedom: In a command market economy, individuals and businesses have limited economic freedom as the government controls most economic decisions. In contrast, a mixed economy allows for more economic freedom, as individuals and businesses can make decisions based on market forces and their own self-interest.

Contrast:

1. Role of Government: In a command market economy, the government has complete control over economic decisions, while in a mixed economy, the government's role is more limited. In a mixed economy, the government's role is to regulate and provide public goods and services, but it allows the market to determine prices, wages, and production levels to a greater extent.

2. Efficiency: Command market economies are often criticized for their lack of efficiency due to the absence of market competition and the central planning of resources. Mixed economies, on the other hand, aim to combine the efficiency of market mechanisms with the social objectives and interventions of the government.

3. Incentives: In a command market economy, individuals and businesses may lack the incentives to innovate and be productive, as the government controls most economic decisions. In a mixed economy, the presence of market forces and competition provides incentives for individuals and businesses to be efficient and innovative.

In conclusion, command market economies and mixed economies differ in terms of resource allocation, ownership, economic freedom, the role of government, efficiency, and incentives. While command market economies prioritize social and economic equality through government control, mixed economies aim to strike a balance between market mechanisms and government interventions to achieve both efficiency and social objectives.