However, in a communist society where everything is owned in common, the decisions of what to produce, who produces, and who receives the benefit of the goods and services are reached through common ownership, meaning that all members of society have an equal ownership interest. The government acts in the people’s best interest and controls the nation’s resources on behalf of its citizens. The government must administer the enterprises as community representatives and decide what is produced, the quantity produced, and how goods and services are distributed. Communist countries like the former Soviet Union, North Korea, and Cuba have command economies, where a central authority makes decisions about producing and distributing goods and services.
In a communist society, individuals and companies are not motivated to provide the goods and services society needs without the potential to earn a profit. Instead, they rely on orders from the government. Command economies have lacked the growth and prosperity of market systems and have failed due to enormous inefficiencies. Production is slow, items are produced but not sold, and long lines exist to purchase in-demand items.
China began to embrace capitalism in the late 1970s by allowing private ownership of businesses, recognizing the inefficiencies of a command economy, and shifting to a more market-driven economy.
