North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and shortages of spare parts. Industrial and power output have declined in parallel from pre-1990 levels. Due in part to severe summer flooding followed by dry weather conditions in the fall of 2006, the nation suffered its 13th year of food shortages because of on-going systemic problems including a lack of arable land, collective farming practices, and persistent shortages of tractors and fuel. During the summer of 2007, severe flooding again occurred. Large-scale international food aid deliveries have allowed the people of North Korea to escape widespread starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions. Large-scale military spending draws off resources needed for investment and civilian consumption. Since 2002, the government has formalized an arrangement whereby private "farmers' markets" were allowed to begin selling a wider range of goods. It also permitted some private farming on an experimental basis in an effort to boost agricultural output. In October 2005, the government tried to reverse some of these policies by forbidding private sales of grains and reinstituting a centralized food rationing system. By December 2005, the government terminated most international humanitarian assistance operations in North Korea (calling instead for developmental assistance only) and restricted the activities of remaining international and non-governmental aid organizations such as the World Food Program. External food aid now comes primarily from China and South Korea in the form of grants and long-term concessional loans. During the October 2007 summit, South Korea also agreed to develop some of North Korea's infrastructure and natural resources and light industry. Firm political control remains the Communist government's overriding concern, which will likely inhibit the loosening of economic regulations.
As you can tell from the paragraph I posted from the CIA World Factbook, a command economy like the one in North Korea controls every aspect in their economy.
A command economy or directed economy is an economic system in which the state or government manages the economy. Its most extensive form is referred to as a command economy, centrally planned economy, or command and control economy. In such economies, the state or government controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income. The planners decide what should be produced and direct enterprises to produce those goods. Planned economies are in contrast to unplanned economies, such as a market economy, where production, distribution, pricing, and investment decisions are made by the private owners of the factors of production based upon their own and their customers' interests rather than upon furthering some overarching macroeconomic plan. Less extensive forms of planned economies include those that use indicative planning, in which the state employs "influence, subsidies, grants, and taxes, but does not compel." This latter is sometimes referred to as a "planned market economy.
Planned economies and socialism
In the 20th century, most planned economies were implemented by states that called themselves socialist. Also, the greatest support for planned economics comes from socialist authors. For these reasons, the notion of a planned economy is often directly associated with socialism. However, they do not entirely overlap. There are branches of socialism such as libertarian socialism, that reject a centralized state, and all of these tendencies reject economic planning as well and instead favor decentrialised collective ownership of the economy and property.
Furthermore, planned economies are not unique to Communist states. There is a Trotskyist theory of permanent arms economy, put forward by Michael Kidron, which leads on from the contention that war and accompanying industrialisation is a continuing feature of capitalist states and that central planning and other features of the war economy are ever present.
Free Market is a theory, not a fact. And it came into concept during a time that is drastically different than modern society (it did not factor in our ability to communicate, transport, of manufacture in the way we do now). If you have everything total free-market and without regulation, then you'd have a place like China where bosses act without regards for anything but bottom-line, and have a huge quazi-slave population is acceptable. Free market also doesn't factor in human being's willingness to exploit others for profit, and it doesn't mention anything about the fact that there will always be someone attempting to manipulate the market for their gains.
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North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment and shortages of spare parts. Industrial and power output have declined in parallel from pre-1990 levels. Due in part to severe summer flooding followed by dry weather conditions in the fall of 2006, the nation suffered its 13th year of food shortages because of on-going systemic problems including a lack of arable land, collective farming practices, and persistent shortages of tractors and fuel. During the summer of 2007, severe flooding again occurred. Large-scale international food aid deliveries have allowed the people of North Korea to escape widespread starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions. Large-scale military spending draws off resources needed for investment and civilian consumption. Since 2002, the government has formalized an arrangement whereby private "farmers' markets" were allowed to begin selling a wider range of goods. It also permitted some private farming on an experimental basis in an effort to boost agricultural output. In October 2005, the government tried to reverse some of these policies by forbidding private sales of grains and reinstituting a centralized food rationing system. By December 2005, the government terminated most international humanitarian assistance operations in North Korea (calling instead for developmental assistance only) and restricted the activities of remaining international and non-governmental aid organizations such as the World Food Program. External food aid now comes primarily from China and South Korea in the form of grants and long-term concessional loans. During the October 2007 summit, South Korea also agreed to develop some of North Korea's infrastructure and natural resources and light industry. Firm political control remains the Communist government's overriding concern, which will likely inhibit the loosening of economic regulations.
As you can tell from the paragraph I posted from the CIA World Factbook, a command economy like the one in North Korea controls every aspect in their economy.
Command Economy :
A command economy or directed economy is an economic system in which the state or government manages the economy. Its most extensive form is referred to as a command economy, centrally planned economy, or command and control economy. In such economies, the state or government controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income. The planners decide what should be produced and direct enterprises to produce those goods. Planned economies are in contrast to unplanned economies, such as a market economy, where production, distribution, pricing, and investment decisions are made by the private owners of the factors of production based upon their own and their customers' interests rather than upon furthering some overarching macroeconomic plan. Less extensive forms of planned economies include those that use indicative planning, in which the state employs "influence, subsidies, grants, and taxes, but does not compel." This latter is sometimes referred to as a "planned market economy.
Planned economies and socialism
In the 20th century, most planned economies were implemented by states that called themselves socialist. Also, the greatest support for planned economics comes from socialist authors. For these reasons, the notion of a planned economy is often directly associated with socialism. However, they do not entirely overlap. There are branches of socialism such as libertarian socialism, that reject a centralized state, and all of these tendencies reject economic planning as well and instead favor decentrialised collective ownership of the economy and property.
Furthermore, planned economies are not unique to Communist states. There is a Trotskyist theory of permanent arms economy, put forward by Michael Kidron, which leads on from the contention that war and accompanying industrialisation is a continuing feature of capitalist states and that central planning and other features of the war economy are ever present.
For more details see the link...
http://en.wikipedia.org/wiki/Command_economy
Free Market is a theory, not a fact. And it came into concept during a time that is drastically different than modern society (it did not factor in our ability to communicate, transport, of manufacture in the way we do now). If you have everything total free-market and without regulation, then you'd have a place like China where bosses act without regards for anything but bottom-line, and have a huge quazi-slave population is acceptable. Free market also doesn't factor in human being's willingness to exploit others for profit, and it doesn't mention anything about the fact that there will always be someone attempting to manipulate the market for their gains.