In a transition from a command economy to a free market economy, the mechanism for deciding "for whom to produce" changes from:
state-directed allocation based on planning priorities and rationing to allocation based on consumers' purchasing power and effective demand.
capital-intensive production targets set by central planners to cost-minimising resource combinations chosen by private firms.
consumer sovereignty determining market prices to central committees determining the output of merit goods and public goods.
the production of essential capital goods for industrial development to the production of luxury consumer goods to maximise corporate profits.
