Command systems in the Soviet Union and pre-reform China failed primarily because of:
A) coordination and incentive problems.
B) greater resource scarcity than in market systems.
C) the failure to accumulate and use capital.
D) the failure to specialize in production.

Question

Quizplus · Accepted Answer

Command systems in the Soviet Union and pre-reform China failed primarily because of coordination and incentive problems. In command systems, the state owns and controls the means of production, centrally plans economic activities, and allocates resources. This centralization of economic decision-making often leads to coordination problems as it becomes challenging to ensure the efficient use of resources. Additionally, in a command system, there are few incentives for workers to be productive, and this lack of motivation can lead to poor resource allocation, lower output, and ultimately economic inefficiency.

Command Systems in the Soviet Union and Pre-Reform China Failed