The command economic system, which was characteristic of a number of countries, appeared due to the socialist revolutions that took place in them. The ideological banner of this system were the postulates of Marxism. This model of the economy was developed by Lenin and Stalin - the leaders of the Communist Party of the USSR. The roots of the idea go back to the doctrine of social utopia. The introduction of the system is typical for countries of Eastern Europe and Asia in the first half and middle of the twentieth century.
The command economy is a system of conducting the national economy based on managing it through administrative orders. According to Marxist theory, it was precisely such a device that was supposed to accelerate the process of increasing general welfare. In this case, the elimination of competition was a prerequisite, which would allow to conduct all the economic activities of the country in accordance with a single obligatory (directive) plan. The development of development planning features was carried out on a scientific basis by the country's leadership.
In the 50-80s (the heyday of the communist camp), about a third of the world's population lived in countries dominated by the administrative-command economic system. The introduction of this system began with the practical suppression of personal freedoms of citizens and throughout its existence was accompanied by serious human casualties.
The command economic system of the USSR was characterized by such signs:
- the state planning committee determined what enterprises should produce;
- the line ministry determined how production should be carried out and dictated technology, because it allocated funds;
- the state procurement committee decided where the manufactured products will be supplied and to whom it will be sold, and also determined where to acquire resources for new production cycles;
- the state committee on pricing calculated selling prices that have not changed for decades;
- wages for workers were appointed by the State Committee for Labor and Wages;
- revenue management was in the hands of the Ministry of Finance;
- The State Committee for Construction determined in which direction and volume production will develop;
- state banks set the amount of funds that enterprises could take from them;
- The Ministry of Foreign Trade dictated which goods could be exported and which should be sold exclusively in the domestic market.
The command economic system is, first of all, the destruction of all forms of ownership, except the state. This gives the authorities the right to command the use of all economic resources. Against this background, there was a distribution of benefits for personal use in the so-called queue order (or by coupons).
In general, the idea of economic planning is quite reasonable, but within the same enterprise or, for example, farm. If we are talking about planning nationwide, then this leads to a distortion of the objective laws of the economy. It can only be expedient in times of emergency (wars, revolutions, natural disasters, etc.).
In the end, socialism (a command economic system) turned into disappointment, and countries had to tackle the revival of private property and the market system.
The 90s were the final year for the USSR and the countries of Eastern Europe in terms of assessing what was achieved through the introduction of a command economy. In the analysis, it turned out that these results were very sad. Most of the products were characterized by low quality and outdated designs, therefore, were not in demand in the market; life expectancy of citizens and their level of well-being was lower than in countries that chose the path of a market economy. The level of the manufacturing sector as a whole was also significantly lower than in Europe, and nature turned out to be much more polluted.