Economic Systems and Command Economies

Economic systems are categorized into three primary types: traditional, command, and market economies.
A market economy is based on individual choice, consumers, and producers rather than government directives.
In Wealth of Nations, Adam Smith noted that individuals acting in economic self-interest are led by an invisible hand to promote the interests of others.
Current examples of economies following government-directed systems include North Korea and Cuba.

Traditional economic systems focus on societal survival, using custom, ritual, and historical methods for production and distribution.
Advantages include clearly defined economic roles and minimal disagreement over economic goals.
Disadvantages include resistance to change, lower productivity, lower standard of living, and preventing people from working jobs they are best suited for.
The Kavango people (also referred to as Kavango) of Namibia in Southern Africa historically lived as sustenance farmers, but modern telecommunications have pressured young people to move to cities or transition to commercial farming.
There are no pure traditional economies today; remaining groups exist as mixed systems, such as Amish communities in Manitoba and how to ride colonies.

In a command or centrally planned economy, government central planners make all economic decisions, controlling job allocations, work hours, production quotas, and wage scales.
Karl Marx, a 19th-century German philosopher, historian, and economist, analyzed history as a class struggle between industrialist factory owners and workers, predicting workers would transfer factory ownership to public hands (Das Kapital / Marxism).
Socialism involves government ownership of basic factors of production; democratic socialism establishes government control of basic industries through democratic processes.
Communism is an authoritarian form of socialism with no private property ownership and little to no political freedom.

North Korea implemented communist command policies following World War II, directing resources to build a military of over 1,000,000 soldiers out of a population of about 22,000,000 along with a nuclear program.
Misguided central planning caused extreme food shortages in North Korea during the late 1990s and early 2000s, causing millions of deaths from hunger until food aid arrived from South Korea; restrictions on private ownership were relaxed in 2003.
Theoretical advantages of command economies include providing for non-productive individuals (the sick and old) and producing non-profitable items like medicines.
Practical disadvantages include planners' lack of local knowledge, lack of worker motivation, severe shortages (such as light bulb trading in the former Soviet Union), and state-enforced collective farming in China and The Soviet Union resulting in more deaths than two world wars.