Economics systems never lack in movement. They are persistently in transition, and alter as the history and culture of their people alter. They differ as government changes and as reformed theories/concepts of economic management conquer.
A Planned Economy differentiates from a Market Based Economy in several ways; it all comes down to ‘What to Produce’, ‘How to Produce’, and ‘For Whom To Produce’. In a planned economic system ‘What to Produce’ is determined and controlled by the Government, supposedly to benefit the country. In comparison to a Market Economic System, customers are seen as inferior as opposed to ‘scientific, medical and space research, and military production’; these are seen as first priority. In a Market Based Economy decisions are made dependent on market force. Consumers play a central role in choices made in ‘what to produce’ and make majority of ‘what?’ decisions by making dollar votes in the market. In a planned economy, ‘How to Produce’ verdicts are made centrally, central planners set production aims for regions and have set prices for farmers and factories. However, in a Market Economy producers are given the opportunity to be able to make choices of what mix of resources to use in production, to benefit their customers. Lastly, in a Planned Economy, ‘For Whom To Produce’ the governments planning bureau controls wages, meaning no extra pay for working overtime. In a Market Economy, ‘For Whom To Produce’ the individuals income determines the share of the economy’s production of goods and services that they or their household receives.
Examples of transition processes in economies, e.g. transition from planned to market economy, include the Economic Reform e.g. decisions to pursue a new economic theory, Political change, the Economic Theory, and Globalization. There have been significant benefits of transition, although the costs of