Gr9 EMS: Eco. & Entr. | Term 1 | Lesson 1 | Economic systems - Planned economy

Planned Economy

Economic systems determine how a country allocates resources for production, distributes goods and services, and makes them available for consumption.

They address the economic problem: people have unlimited needs and wants, but resources are limited. The lesson illustrates this with a toilet-paper shortage during the looting in KwaZulu-Natal.

In a planned economy, the government decides what goods and services are produced and consumed, and how resources are distributed. These decisions are based on what the government believes is best for citizens.

Example from the Lesson

The lesson revisits Kamva, founder of the fictional Ikasi Kofu coffee company. In a planned economy, Kamva would depend on the government to provide coffee beans. He might also be restricted in how much he could produce—or whether he could operate the business at all.

The lesson names North Korea, China, Cuba, and Russia as examples of countries that use planned economies. It also says the Chinese government restricts WhatsApp to regulate the information sent to citizens.

Characteristics

The presenter gives three keywords to remember:

• Government: The government owns the land, natural resources, factories, and farms.
• Citizens: Citizens are not allowed to own property.
• Competition: Businesses do not compete to offer goods and services at different prices.

Advantages

• Closed: The lesson describes planned economies as stable because they are closed economies with little interference.
• Direct: The government can direct resources to areas where they are most needed.
• Welfare: The system aims to ensure citizens’ welfare is taken care of.

Disadvantages

• Limited growth: Economic growth may be limited because there is no entrepreneurship or competition.
• Limited choice: Consumers have little freedom of choice because the government supplies goods and services.
• Lack of motivation: Workers may lack incentives to do their jobs well, making it difficult to motivate them to excel.

Practice and Next Steps

Learners are asked to complete a fill-in-the-blanks activity using a word bank, with the option to pause the video.

The presenter encourages learners to review the material, study any additional facts required by their teacher, and complete the self-marking assessment. The question of whether South Africa has a planned economy is deferred until after the next two economic systems have been covered.

The next lesson will cover the market economy.

Speakers and Sources

• Shante Manuel: Presenter and narrator.
• Kamva Makeba: Fictional business owner used as an example; he is discussed but does not speak in the subtitles.