How does command economy works?

[Chiang Kai-Shek]

By implementing command economy, you are required to subsidise every building, and every time I pass this law, I will run into massive financial deficit. I tried switching production methods and downsizing buildings, but it creates bunch of unemployed pops that will just eat up welfare payments.

My thought on the solution is using vanguardist leaders to switch to autocracy, outlaw dissent to get more authority for more taxes, and not pass any social security laws. Am i missing anything else that can help running a sustainable command economy?

Edit: After a few more playthroughs I finally found out how Command Economy Works

It is basically an upgraded version of interventionism, and subsidising helps reduce radicals and raise loyalists, because it maintains living standards for lower-strata pops, rather than firing them when markets are down.

My suggestion is, if you want to use command economy, better go vangardism

[Evilgenius]

The only time I got command economy to "work" is when I had a huge population to tax. You have to get income from tarrifs, so protectionism is also a must have. All in all it is simply not the best form of economy, seeing as you get 0 investment pool money, so I would advise that you only implement command economy when you have built an already stable economy, since you will have difficulty builing new stuff.

It is still fun to mess around with, plus the flag change makes it worth it all.

[RandyNewman]

It's not polished or balanced at all. They just swap Capitalist pops for Bureaucrat ones. They get taxed about the same rate, they join more loyal IG's, and more of the profits go to the other employees... buuuut none of them pay investment pool money, and the forced auto-subsidies mean wages just keep climbing at the expense of the state budget. The State doesn't actually get to collect the profits directly, like you'd think it would, and it doesn't get any type of bonus to "dividends" tax rates.

Maybe Paradox will rebalance it in the future, but I wouldn't hold my breath. If you want to keep industrialists/capitalists in check you're better off using worker cooperatives. Both SOL and goods demand will skyrocket without driving you bankrupt

[Supply Slut]

Originally posted by RandyNewman:

It's not polished or balanced at all. They just swap Capitalist pops for Bureaucrat ones. They get taxed about the same rate, they join more loyal IG's, and more of the profits go to the other employees... buuuut none of them pay investment pool money, and the forced auto-subsidies mean wages just keep climbing at the expense of the state budget. The State doesn't actually get to collect the profits directly, like you'd think it would, and it doesn't get any type of bonus to "dividends" tax rates.

Maybe Paradox will rebalance it in the future, but I wouldn't hold my breath. If you want to keep industrialists/capitalists in check you're better off using worker cooperatives. Both SOL and goods demand will skyrocket without driving you bankrupt

So does anyone know what happens to the profits? Perhaps they could be redistributed to the employees, boosting wages further for more profitable industries, or give at least a decent portion to the state.

If those profits just evaporate then command economy is objectively much worse. If the profits went to employees, and thus were also taxed, that could be viable. And subsidies shouldn’t be mandatory, should be able to have that covered by social security wage subsidies.

[Evilgenius]

Originally posted by Supply Slut:

So does anyone know what happens to the profits? Perhaps they could be redistributed to the employees, boosting wages further for more profitable industries, or give at least a decent portion to the state.

If those profits just evaporate then command economy is objectively much worse. If the profits went to employees, and thus were also taxed, that could be viable. And subsidies shouldn’t be mandatory, should be able to have that covered by social security wage subsidies.

As far as I could see, the profits get divided among all workers as dividend, and with the right tax law you can tax dividend. Your people do get a great quality of life under command economy, if you already have a fully functioning economy, it is just that non of the dividend goes into investment, so building gets expensive.

[RandyNewman]

Originally posted by Supply Slut:

Originally posted by RandyNewman:

It's not polished or balanced at all. They just swap Capitalist pops for Bureaucrat ones. They get taxed about the same rate, they join more loyal IG's, and more of the profits go to the other employees... buuuut none of them pay investment pool money, and the forced auto-subsidies mean wages just keep climbing at the expense of the state budget. The State doesn't actually get to collect the profits directly, like you'd think it would, and it doesn't get any type of bonus to "dividends" tax rates.

Maybe Paradox will rebalance it in the future, but I wouldn't hold my breath. If you want to keep industrialists/capitalists in check you're better off using worker cooperatives. Both SOL and goods demand will skyrocket without driving you bankrupt

So does anyone know what happens to the profits? Perhaps they could be redistributed to the employees, boosting wages further for more profitable industries, or give at least a decent portion to the state.

If those profits just evaporate then command economy is objectively much worse. If the profits went to employees, and thus were also taxed, that could be viable. And subsidies shouldn’t be mandatory, should be able to have that covered by social security wage subsidies.

Unless it changed in a recent patch, profits in government-owned industries get paid out as dividends to the bureaucrats that work there. Wages for all the employees do get better than they were under private ownership, but that's probably just from the industry being subsidized.

I don't think Paradox wanted to bother with making new game mechanics for one or two Laws, so they slapped together a "Planned Economy" Law that works with the existing game mechanics... except it doesn't fit well in that box, and the changes are mostly cosmetic. They weren't really trying.

What you're describing is actually what the Worker Co-operative ownership method does. They pay the profits out as dividends to every employee that works there. They start giving themselves wage raises once the cash reserves are close to full, with the rarer professions, like Engineers, still receiving higher wage rates. Again, this uses the same game mechanics that Private Ownership or Public Trading does, except this one actually fits well within those mechanics, and Paradox did a good job designing it.

[Kimlin]

I haven’t tried but I would imagine that once your economy is a decent size, 1B or so, the minting could cover a large amount of your costs. Then you can play around with whatever you want.

[DinoMight]

its almost as if command economy is bad idea IRL

[Prasiatko]

Set it up before hand so that none of your industries are reliant on subsidies before switching to it.

[Ratio decidendi]

It's only sustainable if you already have a strong, stable economy before transitioning. It's tricky to get it right.