Topic:Socialist economics

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Socialist/Communist Economics

The fundamental principle of Socialist/Communist Economics is that free markets are inherently self-destructive, and thus the economy must be controlled by a governing body, usually the State. The main difference between socialism and communism is that of degree, communism promoting more control than socialism. Since the underlying tenant of Socialist/Communist Economics is government control, it is also known as Control or Command Economics.

The founding document of Command Economics is Karl Marx's "Communist Manifesto". Its Free Market counterpart is Adam Smith's "The Wealth of Nations". While Smith claims that the self interest of the butcher and the baker are sufficient to balance any economy, Marx proposes that the greed of any or all parties will eventually bring the system down. "The Communist Manifesto" is also a political book; since in Command Economies the economy is controlled by the government, politics are inherent to this economic theory.