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    in a command economy, how does the government encourage business?

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    A command economy, or a planned economy, is an economic system where the main economic decisions (such as allocating scarce resources like labour, capital, soil and natural resources) are taken by a central body; which is usually the government. This system contrasts that of a market economy where all the economic actors involved take decisions. The benefit of a planned economy is that the planning body has perfect information, and can make a better decision than in the market economy.
    Friedrich August von Hayek, a 20th century economist pointed out that it is not possible for the planning body to have perfect information. For this reason, the decisions taken by this body will be wrong, as it is not possible to foresee all parameters. Once the decision has been taken there is only a small margin to vary the production; this means that a planned economy cannot adapt to a change as rapidly as a market economy. According to Ludwig von Mises, there is no competition, and there are no reasons to innovate or to look for different solutions to a problem, in a planned economy. A command government is a economic system where the government takes control over all the land and keeps it all to themselves. The government tells what to produce how to produce the goods/services and whom may get the goods and services. The government makes all the laws.
    Communism is a type of government system that would use a command economy.  An example of this type of government is Cuba the government regulates all the laws.



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