THE COMMAND
ECONOMY back to
Economies page
A command economy is one in which a central authority has control of the
resources of the economy and makes most of the economic decisions.
TODAY
: DICTATORSHIPS OR CUBA OR CHINA
IN THE PAST: NEW FRANCE & THE WARTIME ECONOMY OF THE 1940'S
NEW
FRANCE
New France was discovered by accident while explorers were searching for
shorter trade routes to India and China, where they hoped to find rich sources
of gold and spices. By accidentally discovering central and South America they
did discover gold and silver produced by the Aztec civilization.
In Canada the first resources to be exploited were - FISH & FURS.
1. a source of NATURAL RESOURCES for the people of France.
2. A place where the FINISHED MANUFACTURED GOODS could be sold.
The King had ABSOLUTE POWER until 1663, then he appointed officials. The
main one was the INTENDANT, who ran the economy of the colony the way the King
wanted it.
The industry was AGRICULTURE & FUR TRADING. Furs, fish and other raw
materials were sent back to France. In New France, LAND = WEALTH. Land was given
to the Lords (Seigneurs) of the King in return for Taxes and a promise to settle
the land.
The Lords got farmers (habitants) who paid the Lord taxes and if the
farmer didn't pay the taxes the Lord would take his land.
GOODS
PRODUCED = WHEAT, TOBACCO, OATS, HEMP (a plant used for making sails).
THE
BRITISH COLONIES OF THE TIME WERE RUN IN MUCH THE SAME MANNER.
WHAT
WAS THIS TYPE OF ECONOMIC ACTIVITY CALLED?
CANADA'S
WARTIME ECONOMY OF THE 1940's.
The entire economy of Canada was involved in the WAR EFFORT. North
America became a very important resource area for the Allies.
1941
- The WARTIME PRICES AND TRADE BOARD set maximum prices that goods could be sold
for in Canada.
1942 - Goods were rationed such as food and fuel.
THE
GOVERNMENT HAD ABSOLUTE POWER
There
was an increased demand for resources to supply the war effort such as materials
for PLANES, SHIPS, TANKS, BOMBS. The war was destroying economic resources in
Europe.
1.
soldiers, as well as others were killed
2. factories, roads and rail lines were being destroyed
3. dams and oil tanks were bombed
4. bridges were destroyed
5. land and crops were burnt or otherwise destroyed
Men
left jobs and joined the army. Women entered the factories to do the labor jobs.
Production doubled but demand > supply which led to rationing, by the
government, of some goods.
Rationing = coupon book of rations slips were given to each person to
purchase scarce goods such as; MEAT, SUGAR, TEA, COFFEE, GASOLINE
This
controlled the amount a person or family could buy and assured everyone of a
fair share.
AS
SUPPLY OF CERTAIN ITEMS CHANGED THE NUMBER OF COUPONS REQUIRED TO BUY IT
CHANGED.
HEATING
OIL & GAS WAS RATIONED BASED ON NEED.
STOVES & TIRES - you had to apply to the government for a permit to
purchase.
RATIONING
CONTINUED UNTIL A FEW YEARS AFTER THE WAR. THERE WERE FEW HARDSHIPS CAUSED BY
THE GOVERNMENT DECISION TO RATION. EVERYONE AGREED THAT IT WAS THE RIGHT THING
TO DO AND ACCEPTED IT.
GOVERNMENT
CONTROL DURING A WARTIME ECONOMY RESULTED IN LESS FREEDOM OF CHOICE. THIS WOULD
NOT BE SO EASILY ACCEPTED IN THIS DAY AND AGE.