Question

In theory, centrally planned economies allow all people to consume goods equally. In reality, however, people at upper levels are paid more and have access to more goods. Why do you think this has been true?

Answer 1

In centrally planned economies, the allocation of goods and services is determined by the central government rather than market forces. In practice, however, these economies have often been characterized by corruption, lack of incentives for productivity and innovation, and unequal distribution of resources, leading to unequal access to goods and services, even within the same economic class. This happens as central planning tends to lead to inefficiencies, particularly in the allocation of goods and services, which can create opportunities for corruption and black markets. Furthermore, political power often becomes closely tied to access to resources, leading to a concentration of wealth and power among a small group of people