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. New France, as a colony, was to serve 2 purposes.

   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.