How is the problem of distribution resolved in a socialist economy? Please I need the answer now !!
Answers
Under the socialist system, producers produce what ever a central, governmental planning board tells them to produce. The few people on a planning board can never know nor sift through all of the information that the free market produces and sifts for the capitalist producer. The k consumers have to buy or reject whatever is put before them, because the producers are not responding to whether or not the consumers actually need their products; the producers are only responding to the central planning board, which cannot know and may not care what the consumers need. The planning board's decisions may be driven by factors such as a member of the governing body has a lot of rubber plantations and wants automobile tires made from natural rubber instead of better petroleum based rubber. Guideance for the producer under socialism comes from the politically powerful and from communist party ideology.