Planwirtschaft

Planwirtschaft, or planned economy, is an economic system where the government makes the key decisions about production, resource allocation, and prices, rather than allowing market forces to operate freely. In this system, central authorities create detailed plans to control how goods and services are produced and distributed, aiming to achieve specific societal goals such as equality or economic stability. It contrasts with market economies, where supply and demand determine these factors. While it allows for coordinated development and resource management, it can also lead to inefficiencies and lack of innovation due to limited competition and individual entrepreneurship.