![]() Many necessities like healthcare and education are provided for free. The government decides what methods of production will be used and how much workers will be paid. In a command economy, the government decides what goods and services will be produced and what prices will be charged for them. In the last century, communism emphasized command economies. In return, vassals provided labor and soldiers to do the lord’s bidding. Medieval manor life is another example: the lord provided the land for growing crops and protection in the event of war. Ancient Egypt was a good example: a large part of economic life was devoted to building pyramids for the pharaohs. ![]() In a command economy, economic effort is devoted to goals passed down from a ruler or ruling class. Because things are driven by tradition, there is little economic progress or development.Ĭommand economies are very different. What you produce is what you get to consume. Most families are farmers who grow the crops they have always grown using traditional methods. Traditional economies organize their economic affairs the way they have always done (i.e., tradition). The first is the traditional economy, which is the oldest economic system and can be found in parts of Asia, Africa, and South America. ![]() There are at least three ways societies have found to organize an economy. Who organizes and coordinates this system? Who insures that, for example, the number of televisions a society provides is the same as the amount it needs and wants? Who insures that the right number of employees work in the electronics industry? Who insures that televisions are produced in the best way possible? How does it all get done? The economic life of every individual is interrelated, at least to a small extent, with the economic lives of thousands or even millions of other individuals. It includes all production of goods and services, all buying and selling, all employment. Think about what a complex system a modern economy is.
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