NAME : AHMAD RAHMATILLAH NIM : 1810313310011 CLASS : B AKUNTANSI 2018 CENTRAL CONTROL OF THE ECONOMY In countries that have a communist system, private ownership and private companies are greatly reduced because the economic system is regulated by the government. They are reduced to a minimum. They still exist, but are limited to small areas in the economy. Karl Marx imagined a world where there would be no private property at all. In theory, communism demands that all property must belong to the state. This system is related to the needs of the country as a whole, not to the needs of individuals. Emphasis on collective efforts and not on personal efforts so that individuals are subject to the needs of the collective state. But in practice, citizens of the Soviet Union were allowed to own private property. What is important in the communist system is central planning, meaning that in the economy here the government or the State is fully or has full power to determine and regulate all economic activities carried out. The central authority here has full power in deciding what goods and services will be produced and also controlling its quality, deciding how many items will be produced, deciding how they will distribute it and what price will be charged for them. The communist system has advantages and disadvantages. As for the advantages that all activities and economic problems are controlled by the government so that the government is easy to supervise the running of the economy, there is no economic gap between the rich and the poor because the distribution of government can be carried out evenly, the government can more easily regulate the goods and services to be produced according to the needs of the community, the government is more easily interfered in price formation. As for the shortcomings is to kill the creativity and innovation of each individual, there is no freedom to have power, there is less variation in the production of goods, because it is only limited to government regulations. In the communist system the state provides all or most of what services its citizens need, and is responsible for the economy and concerned with the methods of production and with quality and quantity. The central authority must plan the national economy for several years to come.
