Central Planning

Central planning is an economic system where a central authority, usually the government, makes all important decisions about production and distribution of goods and services. Instead of relying on market forces like supply and demand, central planners set goals, allocate resources, and control prices to achieve specific economic objectives. This system is often associated with socialist economies, aiming to promote equality and efficiency, but can lead to inefficiencies and a lack of innovation due to limited competition and market feedback. Examples include the former Soviet Union and some contemporary economies with significant state control.