Administrative and command economy

Administrative and command economy

Administrative and command economy for a long timeexisted in the USSR, and also in some countries of the eastern part of Europe. The main distinguishing feature of such a state system is the absolute power of the government and its influence in all spheres of society. Of course, officially all property belonged to the society, and everything was in the hands of the population.

State in a command-administrativeeconomy sought to achieve centralized influence, directive planning, and in some cases reached despotism. In such conditions, the owners of enterprises and organizations were deprived of the opportunity to function independently, because they completely depended on the state administration apparatus. If we talk about market relations, then the supply and demand is formed not under the influence of free competition, but at the will and order of the ruling party. And this is not surprising, since the controlling bodies are engaged in the distribution and marketing of the finished goods.

The administrative-command economy is organizedso that the power is maximally concentrated in the hands of officials. And this, in turn, greatly exacerbates the bureaucracy. The lack of competition and the excessive pressure of government agencies hinder the development of industry, which leads to a decrease in production efficiency. Absolute monopolization explains the decline in sales and the shortage of products. The society is growing tense due to a total lack of food, clothing and other essential goods.

The production plan was drawn up in advancedirectly authorized state bodies. The government believed that it was irresponsible and inexpedient to trust such a complex mechanism of calculation for enterprise managers. The biggest mistake of the bodies of planned development is the principle of their calculation, since the estimate of production was based on the established minimum needs of the population. It was assumed in advance that a person would not take more goods than he needed. Although the detailing and consideration of unforeseen circumstances should have been present, it may have improved the well-being of citizens.

The administrative-command economy suppressed andactivity of mass media. At these times, there was severe censorship, the ignoring of which threatened not only with responsibility in the form of imprisonment, but also threatened the life of a daredevil. The concept of freedom of speech did not exist then, and only material approved by the controlling services was given to the press.

The command-administrative economy isa system that has both positive and negative sides. The downside of this way is primarily in the absence of development of the production sector, which significantly reduces the efficiency indicators. In addition, the centralization of power lengthens the process of making any decision regarding the adjustment of the preliminary plan. While the request will reach the highest body, then it will be considered and an official order will be issued with the acceptance of the proposal or refusal, it will take a very long time.

Nevertheless, the administrative-command economyhas significant advantages. The government managed to achieve strict observance of the established disciplinary norms, because everyone knew what would be for the violation. In addition, every citizen of the country could be confident of his own future. According to the slogans of that time, labor ennobled a person. The working person will always be provided with food and housing, and the parasites were made to re-educate.

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