Honestly, the idea of a "command economy" feels like something from a dusty Cold War textbook. You think of Soviet bread lines or Maoist uniforms. But it’s 2026, and the question of which country uses command economy isn't just a history lesson—it’s a reality for millions.
It’s messy.
While the world is obsessed with AI-driven markets and decentralized finance, a handful of nations are doubling down on the old-school, top-down approach. They aren't just "regulating" things. They are literally running the show. We’re talking about governments that decide exactly how many shoes get made, who gets to buy them, and what they’ll cost down to the last cent.
The Last Pure Holdout: North Korea
If you’re looking for the textbook definition, North Korea is basically the only one left standing in the "pure" category.
It’s extreme.
In Pyongyang, the government doesn't just influence the market; it is the market. The state owns everything. Land, factories, the local grocery store—it all belongs to the ruling party. Right now, in early 2026, they are deep into what they call the "20x10 regional development plan." It sounds like corporate jargon, but it’s actually a massive government mandate to build industrial hubs in 20 different counties every year.
Kim Jong Un has been personally showing up to open these factories. One day it’s a paper mill, the next it’s a hospital. There is no "investor" deciding if these projects make sense. The state just says, "Build it," and it happens. But here's the catch: because there's no market feedback, these places often run out of raw materials almost as soon as the ribbon is cut. It’s a perfect example of the command economy’s biggest flaw: you can command a factory to exist, but you can’t command a supply chain to work perfectly without incentives.
Cuba: The Command Economy in Crisis
Then you have Cuba.
For decades, Cuba was the poster child for the planned model. But things are getting complicated. By 2026, the Cuban economy has shrunk by nearly 15% compared to where it was just a few years ago. The government still employs about 75% of the workforce, and they still ration about 80% of the food.
But they’re sweating.
The state has started letting some small private businesses (MSMEs) breathe, but it’s a weird "one step forward, two steps back" dance. One month they allow private cafes to open; the next month they slap them with massive taxes because the government is scared of losing control. If you visit Havana today, you’ll see the command economy’s scars: state-run stores with empty shelves while the "informal" market—the real market—hustles in the shadows.
It’s a command economy that is effectively running out of things to command.
What About China and Vietnam?
This is where people get confused. You’ll often hear folks ask if China is a command economy.
The short answer? No. Not really.
Technically, China uses a "Socialist Market Economy." It’s a hybrid. Sure, the Communist Party has a massive grip on the steering wheel, and they still love their Five-Year Plans. But 60% of their GDP comes from the private sector. If you want to start a tech company in Shenzhen, you don’t wait for a government permit to tell you what price to sell your app for.
Vietnam is similar. They’ve embraced what they call "Doi Moi" reforms. They are booming in 2026, targeting double-digit growth, and they’re doing it by acting more like a market economy than a command one. They still have state-owned enterprises, but they’re competing on the global stage now.
Why Does Anyone Still Use This System?
It sounds miserable, right? So why stick with it?
There are a few "perks" that keep these regimes holding on:
- Zero Unemployment (On Paper): The government just assigns you a job. It might be a useless job, but you’re "employed."
- Rapid Mobilization: If the government wants a dam built, they don't deal with lawsuits or environmental protests. They just move the dirt.
- Social Safety Net: In a place like Cuba, healthcare and education are free. The quality is debated, but the access is mandated.
But the downsides are brutal. Innovation dies because there’s no reward for being better. If the government pays you the same whether you make 10 chairs or 100 chairs, you’re probably going to make 10 and take a nap.
The 2026 Reality Check
Besides North Korea and Cuba, you see "command-lite" tendencies in places like Iran and Venezuela.
In Iran, the state controls about 60% of the economy, especially the big stuff like oil, banking, and power. Venezuela tried to command their prices to stop inflation, and it backfired spectacularly, leading to the shortages we’ve seen in the news for years.
How to Identify a Command Economy Today:
- Price Fixes: Does the government set the price of milk, or does the store?
- Resource Allocation: Does a central board decide who gets the steel this month?
- Ownership: Can a regular person own the factory they work in?
Moving Forward: What This Means for You
If you're looking at global markets, understanding the country that uses command economy is vital for risk assessment. These regions are usually "no-go" zones for traditional investment because your assets can be seized by a government whim.
If you want to understand the impact of these systems on a deeper level, look at the divergence between North and South Korea. It’s the ultimate A/B test of economic theory. While one side commands, the other competes.
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To stay ahead of how these shifts affect global trade in 2026, start by tracking the "State-Owned Enterprise" (SOE) reforms in transition countries like Vietnam and Uzbekistan. These are the places where the "command" is slowly fading, creating some of the most interesting (and risky) emerging markets in the world. Keep an eye on the official government "Development Plans" issued by these nations—they are the closest thing you'll get to a roadmap for where the money is allowed to go.