An economic system in which economic decisions made to answer the basic economic questions of “what”, “how”, and “for whom” is made by an authority such as a feudal lord or a government-planning agency.
A type of political economy in which the state assumes total control of virtually all significant factors of production. The state replaces or eliminates the role of private owners of land, labor, and capital, makes all production decisions, and determines the values of all goods. The state owns, plans, controls and regulates all major economic activity. Compare Market economy.
except for human resources, most productive resources are owned and controlled by a central authority such as feudal lords or government planners. Those in power also decide what will be produced and how it will be distributed. Emphasis is placed on achieving social goals they establish. Cuba, North Korea and the former Soviet Union provide examples.