Socialist Economy
The idea of state economy was given by German philosopher Karl Marx. production of goods and services in the state economy and The distribution is owned by the state or collectively. government in He has all the powers. production, supply and price All the decisions are taken by the government. economic decision social Keeping welfare in mind. such economies Also commonly called 'centralized planned economy'. State There are two forms of economy - socialist economy and communist Economy. Under the socialist economy, goods and services are distributed equally to all the citizens, whereas in the communist economy, each person is provided work according to his capacity and the reward i.e. goods and facilities are provided to each as per his requirement.
In a state economy, the economic activities production, consumption, investment and exchange are controlled by the government or any central institution. Under this, economic decisions are taken keeping in mind the social welfare. Economic activities are active in the public sector items should be produced under the state economy, this decision is taken by the government, so here the dominance of the consumer is hampered. In this, most of the resources are controlled or owned by the government. The selling price of the goods is decided by the government itself and in the market.
The economy of the former Soviet Union is called 'socialist economy', while the economy of China before 1985 is called 'communist economy'.
Characteristics of Socialist Economy
- Collective ownership of the resources of production
- Centralized Planning
- Reducing economic inequalities
- End of class struggle
- Comprehensive role of state and government.
