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The advantages of a planned economy are that the high degree of control leads to a high level of stability in the system which means that an investor will not lose his money due to some sudden downturn and the changes are quite predictable. The entire system conforms to certain standard which means that everything is uniform which helps establish more control. In a planned economy, the individual efforts are directed towards a certain goal by the restrictions which mean that all the energy can be focused towards achieving a specific economic and social goal of the government. It can eliminate consumerism and luxuries much easily.
Some of the disadvantages of a planned economy are that since the production does not take into account what the consumers want; shortages and over supplies become quite common. The planned economy does not operate a commercial stand point so even if the production systems are efficient, there may be no demand for the goods abroad that would earn foreign exchange. There is no incentive for innovation as the consumers must buy a specific type of product; they can not try new things. At the individual level, people do not have freedom to live their lives as they want and they can not choose what they want to eat or wear and many people move to other countries.
Some of the disadvantages of a planned economy are that since the production does not take into account what the consumers want; shortages and over supplies become quite common. The planned economy does not operate a commercial stand point so even if the production systems are efficient, there may be no demand for the goods abroad that would earn foreign exchange. There is no incentive for innovation as the consumers must buy a specific type of product; they can not try new things. At the individual level, people do not have freedom to live their lives as they want and they can not choose what they want to eat or wear and many people move to other countries.
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