Characteristics of a market economy. The main characteristics of a market economy Parameters characterizing a market economic system
This is an economic system in which the fundamental economic problems - what, how and for whom to produce - are solved mainly through the market, in the center of which there is a competitive mechanism for setting prices for products and factors of production. Prices are formed as a result of the interaction of demand for products and supply of products.
Market is a system of relations between sellers and buyers, through which they come into contact regarding the purchase and sale of goods or resources.
In the broad sense of the word market is a social mechanism that provides communication between producers, between producers and consumers of goods and resources.
Various economic agents or market entities can act as producers and consumers in the market. Economic agents- these are participants in market economic relations that own ownership of the factors of production and accept economic decisions. The main economic agents are households, enterprises (firms), the state.
households how economic agents make decisions, mainly on the consumption of goods necessary to support the livelihoods of family members.
enterprise or company, is an economic agent that makes decisions about the production of goods for sale using resources purchased on the market.
State as an economic agent, or rather the government, decides on the redistribution of goods produced in the private sector, and on the production of so-called public goods.
Basic principles of a market economy:
1. The fundamental condition for the emergence and development of a market economy is social division of labor and specialization..
2. For the normal functioning of a market economy, development is necessary private ownership of the means of production.
3. There is a personal interest of producers and owners in a more efficient allocation and use of their resources.
4. In order for the market economy to function effectively, so that resources are used with the greatest benefit, it is necessary freedom of choice and freedom of movement of factors of production.
5. A condition for the effective functioning of a market economy is also state intervention in the economy, its state regulation.
6. For the effective functioning of a market economy morality is needed, the norms of which are developed by mankind.
For the normal functioning of the markets for goods and factors of production, a market infrastructure is necessary.
Infrastructure economy in general, in the broadest sense of the word, are some institutions, organizations, sectors and parts of the economic system that ensure the normal functioning of the entire economy or its individual parts and sectors.
Production infrastructure is a complex of industries that provide external conditions for the development of production. It includes freight transport, roads, electricity, gas and water supply, warehousing, communications, and information services.
social infrastructure is a complex of industries associated with the reproduction of the labor force. This complex includes healthcare, education, housing and communal services, passenger transport, leisure activities, catering, household services.
Market infrastructure is a set of organizational and legal forms, various institutions, organizations that serve various markets and the market economy as a whole and ensure their functioning.
Thus, market economic system is a system where resources are allocated and used primarily through a mechanism market competition centered on the price of the good.
economics capital innovative investment
The concept of the market is the initial concept in the theory of market economy. The market is a system of relations between sellers and buyers, through which they come into contact regarding the purchase and sale of goods or resources. These contacts between sellers and buyers involve some kind of agreement between them, in accordance with which the exchange is carried out at a set price.
A market economy is such an economic system in which fundamental economic problems (what, how and for whom to produce) are solved mainly through the market, at the center of which is the competitive mechanism for setting prices for products and factors of production. Prices are formed as a result of the interaction of demand for products and supply of products.
The conditions for the emergence and development of a market economy are formed in the course of a long historical process of transition from a traditional to a market economy.
The first condition is separation social labor originated in ancient times. History knows a number of major stages in the emergence of the division of labor. The first of them is the separation of cattle breeding from agriculture, the second is the separation of handicrafts as an independent industry, the third is the emergence of the merchant class. The division of labor inevitably requires exchange. Already ancient pastoralists needed agricultural products, and farmers, respectively, needed food. The exchange has expanded. At first, it went only within the community, then an intercommunal exchange arose. Initially, it had primitive forms.
The second condition is the economic isolation or autonomy of producers, the opportunity or freedom for each economic entity seeks to ensure its private interests and the division of labor between producers. Commodity exchange presupposes an obligatory striving for equivalence. And such a desire arises on the basis of economic limitations, the isolation of interests. This isolation historically arises on the basis of private property; in the future, it began to rely on collective property as well. But necessarily limited by some local range of interests (cooperatives, partnerships, joint-stock companies, state enterprises, mixed enterprises, etc.).
The third condition for the effective functioning of a market economy is the independence of the producer, freedom of entrepreneurship. Non-market regulation of the economy is inevitable in any system, but the less the commodity producer is constrained, the more scope for the development of market relations.
The market economy first developed within subsistence farming, performing secondary functions in the national economy for a long time. In some countries, the market economy developed at a faster pace than in other countries, so in them the market economy became the dominant form in the 17th century, in other countries - in the 18th century, in still others - only in the 19th century.
At this stage in the development of society, the market economy is the most widespread economic system in the world at the turn of the 20th-21st centuries. and the most efficient in terms of long-term economic development. In the direction of a market economy, both countries with a transitional economy of a new type and transitional economies of a traditional type in developing countries are developing. Therefore, it is no coincidence that the main attention is paid to the analysis of the features and patterns of the market economic system.
It is customary to single out the following stages in the formation of a market economy:
- 1) Classical capitalism. Classical capitalism existed in the developed countries from the 17th century until the first decades of the 20th century. Classical capitalism is characterized by the following features:
- * the presence of private ownership of economic resources;
- * free competition;
- * the presence of many independent manufacturers;
- * the presence of many independent consumers;
- * personal freedom of all market participants (including labor force;
- * spontaneous nature of price setting under the influence of supply and demand;
- * equivalent exchange value;
- * Orientation of entrepreneurs to maximize profits.
Thus, classical capitalism spontaneously develops on the basis of private property and does not provide for state regulation of the economy. Classical capitalism ensured a significant development of equipment, mechanisms, and man himself. However, at the beginning of the 20th century, economic mechanism did not meet the new needs. Therefore, in most developed countries classical capitalism has been transformed into a mixed economy.
2) Mixed economy (modern capitalism). A mixed economy is understood as an economy functioning on the basis of the market mechanism and state regulation of the economy. A characteristic feature of a mixed economy is the presence, along with the private public sector, the active participation of the state in the regulation economic activity. Such a change in the role of the state is caused, first of all, by the need to develop infrastructure, scientific and technological progress. In the middle of the 20th century, the economy needed a qualitatively new type of worker with a high educational, professional, and cultural level. The implementation of these tasks in a mixed economy rests with the state.
State regulation of the economy makes it possible to adjust supply and demand at the macro level. A major role in achieving a balanced economy is given to government programs development of individual industries, regions. In countries with a mixed economy, significant attention is paid to human development, its needs, and social protection.
3) Social market economy. The social market economy is the most developed form of a market economy, in which the principle of freedom, market management is combined with social order and social progress. Particular attention should be paid to the fact that the social market economy, despite the social orientation of the economy, is a market economy.
The term "social economy" means that:
- * the market economy is focused on solving both economic and social goals;
- * the market economy is limited where it is inefficient and can lead to socially undesirable results.
The social market economy operates on the basis of economic and social orders.
4) The economic order is the rules governing the organizational structure of the economy, the processes taking place in it, as well as the set of institutions responsible for managing it and giving the economy a certain organizational form.
The economic order includes:
- * the procedure governing the right of ownership;
- * competitive order;
- * monetary order;
- * financial order;
Thus, market system characterized by the dominance of private property, the social division of labor, the broad development of exchange relations, it has specific principles and incentives for managing, based on the freedom of enterprise, freedom of choice professional activity for everyone who wants to work, freedom of consumer choice for each buyer. The process of formation and improvement of the market economy system is based on the development of commodity production, which arose before the market economy and is able to persist even in a deformed market economy.
A market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand, and the prices of goods and services are determined by a free price system. The main defining characteristic of a market economy is that decisions on investment and distribution of means of production are mainly made through markets. This contrasts with a planned economy, where investment and production decisions are embodied in the production plan.
A market economy can range from hypothetical laissez-faire and free markets to regulated markets and interventionists. In fact, this or that model of a market economy does not exist in its pure form, since society and government regulate the economy to different degrees. Most existing market economies include some element of economic planning or government intervention, and are thus classified as mixed economies. The term free market economy is sometimes used as a synonym for market economy, but it can also refer to a laissez-faire or anarchic free market model.
The market economy does not logically presuppose the existence of private ownership of the means of production; a market economy may consist of various kinds of cooperatives, collectives, or autonomous government institutions that purchase and exchange capital goods with each other in a system of free prices. There are many variants of market socialism, some of which include self-governing enterprises (employee-owned); as well as models that include public ownership of the means of production, where the means of production are allocated through markets.
The term market economy, used by itself, can be somewhat misleading. For example, the United States is a mixed economy (a significant share of regulated markets, subsidies Agriculture, large amounts of government funding scientific research and developments, state support for medicine), but at the same time it is based on the conditions of a market economy. There are different perspectives on how strong the role of the government should be both in relation to the market economy and in addressing the inequality problems that the market brings.
Capitalism
Capitalism generally refers to an economic system where the means of production are largely or wholly privately owned and managed at a profit, and built on the process of capital accumulation. In general, investment, distribution, income and prices are determined by the markets.
There are different varieties of capitalism with different attitudes towards markets. In the case of laissez faire and free market capitalism, markets are used most extensively with little or no government intervention and regulation over prices and the supply of goods and services. In interventionist capitalism, welfare capitalism, and mixed economies, markets continue to play a dominant role, but are regulated to some extent by the government in order to correct market failures or promote social welfare. In state-capitalist systems, markets are heavily regulated by the state, rely on any indirect economic planning, and/or use state-owned enterprises to accumulate capital.
Capitalism has been dominant in the Western world since the end of feudalism, yet most economists believe that modern economy more accurately describes the term "mixed economy", due to the fact that it contains both private and state-owned enterprises. Under capitalism, prices determine the scale of supply and demand. For example, an increased demand for certain goods and services leads to higher prices, and a decrease in demand for certain goods leads to lower prices.
Anglo-Saxon model of market economy
Anglo-Saxon capitalism refers to the form of capitalism predominant in English-speaking countries and is characteristic of the US economy. It contrasts with European models of capitalism such as the continental social market model and the Scandinavian model.
Anglo-Saxon capitalism refers to the macroeconomic political regime and capital market structure common to all English-speaking countries. Its main characteristics are low tax rates, more open financial markets, low protection in the labor market, and a less socially responsible state that eschews the collective bargaining (trade union) schemes that are present in continental and northern European models of capitalism.
East Asian model of market economy
The East Asian model of capitalism is based on the strong role of public investment and, in some cases, state-owned enterprises. The state takes an active part in promoting economic development through subsidies, promotion of "national champions" and an export-oriented model economic growth.
non-intervention
Laissez-faire is synonymous with what was called a strictly capitalist free market economy in the early to mid-19th century, which classical liberalism (right-wing liberalism) is ideally suited to achieve. It is generally understood that the necessary ingredients for the functioning of an idealized free market system include the complete absence of government regulation, subsidies, artificial price pressure, state-granted monopolies (commonly classified as coercive monopolies by free market advocates), and no taxes or tariffs other than those needed by the government to provide protection from crime, maintain peace and property rights, and provide basic public goods.
Right-liberal supporters of anarcho-capitalism see the state as morally illegitimate and economically unnecessary and destructive.
Social market economy
This model was implemented by Alfred Müller-Armac and Ludwig Erhard after World War II in West Germany. The social market economic model is based on the idea of realizing the benefits of a free market economy, especially economic efficiency and high supply of goods, while avoiding disadvantages such as market failures, disruptive competition, concentration of economic power, and the anti-social effects of market processes. The goal of the social market economy is to realize the highest prosperity combined with the best social security.
One of the differences from a free market economy is that the state is not passive, but takes active regulatory measures. Social policy objectives include employment, housing, and education policies, as well as socio-politically motivated balancing of the distribution of income growth. The characteristics of a social market economy are a strong competition policy and a contractionary monetary policy. The philosophical basis for constructing such a model was neoliberalism or ordoliberalism.
Market socialism
Market socialism refers to various types of economic systems where the means of production and the dominant economic institutions are either located in state property, or jointly owned by private and public entities, but operate in accordance with the rules of supply and demand. This type of market economy has its roots in classical economics in the work of Adam Smith, Ricardo and other socialists and philosophers.
The distinguishing feature between non-market socialism and market socialism is the existence of a market for factors of production and profitability criteria for enterprises. Profits generated from state-owned enterprises can be used in various ways to reinvest in further production, directly fund government and social services, or be distributed to the general public through social dividends or basic system income.
Public ownership models
In the models of market socialism by Oscar Lange and Abbe Lerner, Lange's theorem states that a government agency (called the Central Planning Board) can set prices based on a trial and error approach until they equal the marginal cost of production so as to achieve perfect competition. and Pareto optimality. In this model of socialism, firms are state-owned and run by their employees, and profits are distributed to the public in the form of social dividends.
A more modern model of market socialism, proposed by the American economist John Roemer, is called economic democracy. In this model, socialization is achieved through public ownership of capital in a market economy. The model assumes that the public property bureau will own controlling stakes in public companies, and the profits generated will be used for public funding and basic income.
cooperative socialism
Libertarian socialists and leftist anarchists often propose a form of market socialism in which businesses are owned and operated jointly by their employees, so that the employee-owners are paid directly from the profits. These joint ventures will compete with each other in the same way that private companies compete in the capitalist market. An example of such an economic model would be mutualism.
Self-governed market socialism was introduced in Yugoslavia by the economists Branko Horváth and Jaroslav Vanek. In the self-managed model of socialism, firms are directly owned by their employees and the board is elected from among the employees. These cooperative firms compete with each other in the market, both in terms of capital goods and sales of consumer goods.
Socialist market economy
After the reforms of 1978, the People's Republic of China announced the construction of a "socialist market economy" in which most of the economy is state-owned, but state-owned enterprises are reorganized into joint-stock companies, and various state institutions hold controlling stakes through a shareholder system. Prices are set largely through a free price system, and state-owned enterprises are not subject to close micro-management by the government's planning agency. A similar "socialist-oriented market economy" system was implemented in Vietnam as a result of reforms in 1986.
However, this system is usually characterized as state capitalism rather than market socialism because it does not have a significant role for employee self-management in firms, and state-owned enterprises keep their profits instead of distributing them to employees or transferring them to the government, and largely function for de facto as private enterprises. The benefits of the entire population as a whole are financed from profits, but they do not go to their employees.
Characteristics of a market economy
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The main features of a market economy: the basis of the economy is private ownership of the means of production; variety of forms of ownership and management; free competition; market pricing mechanism; self-regulation of the market economy; contractual relations between business entities; minimum government intervention in the economy |
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Main advantages: |
Main disadvantages: |
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1) stimulates high production efficiency; 2) fairly distributes income according to the results of work; 3) does not require a large control apparatus, etc. |
reinforces social inequality in society; causes instability in the economy; indifferent to the damage that business can cause to people and nature, etc. |
Market economy of free competition formed in the 18th century, but a significant part of its elements entered the modern market economy.
The main features of the market economy of free competition:
private ownership of economic resources;
a market mechanism for regulating the economy based on free competition;
a large number of independent sellers and buyers of each product.
Modern market economy (modern capi talism) turned out to be the most flexible, it is able to rebuild, adapt to changing internal and external conditions. Its main features:
variety of forms of ownership;
development of scientific and technological progress;
active influence of the state on the development of the national economy.
Traditional economy - this is an economic system into which scientific and technological progress penetrates with great difficulty, because. conflicts with tradition. It is based on backward technology, widespread manual labor, and a mixed economy. All economic problems are solved in accordance with customs and traditions.
The main features of the traditional economy:
private ownership of the means of production and the personal labor of their owners;
extremely primitive technology associated with primary processing natural resources;
communal farming, natural exchange;
dominance of manual labor
Administrative command economy (centrally planned economy) is an economic system in which the main economic decisions are made by the state, which assumes the functions of organizing the economic activity of society. All economic and natural resources are owned by the state. The administrative-command economy is characterized by centralized directive planning, enterprises act in accordance with the plan assignments brought to them from the "center" of management.
The main features of the administrative-command economymiki:
basis - state property;
absolutization of state ownership of economic and natural resources;
rigid centralization in the distribution of economic resources and results of economic activity;
4) significant restrictions or prohibitions on private entrepreneurship.
Positive aspects of administrative-command economics
By concentrating resources, it can ensure the achievement of the most advanced positions in science and technology (the achievements of the USSR in the field of astronautics, nuclear weapons, etc.).
The administrative-command economy is able to ensure economic and social stability. Every person is guaranteed a job, stable and constantly increasing wage, free education and medical services, people's confidence in the future, etc.
The administrative-command economy has proved its vitality in critical periods of human history (war, liquidation of devastation, etc.).
Negative aspects of the administrative-commandeconomy
excludes private property for economic resources.
Leaves a very narrow framework for free economic initiative, excludes free enterprise.
The state completely controls the production and distribution of products, as a result of which free market relationships between individual enterprises are excluded.
mixed economy organically combines the advantages of a market, administrative-command, and even traditional economy and thereby, to a certain extent, eliminates the shortcomings of each of them or mitigate their negative consequences.
Russia was practically the first in the world to apply the experience of an administrative-command economy in the form of state socialism. At the present stage, Russia is beginning to use the basic elements of a mixed economy.
mixed economy- a type of modern socio-economic system that is taking shape in the developed countries of the West and some developing countries at the stage of transition to a post-industrial society. The mixed economy has a multistructural character, its basis is private property interacting with state property (20-25%) On the basis of various forms of ownership, various types of economy and entrepreneurship function (large, medium, small and individual entrepreneurship; state and municipal enterprises (organizations, institutions)). A mixed economy "is a market system with its inherent social orientation of the economy and society as a whole. The interests of the individual with his multilateral needs are put forward at the center of the country's socio-economic development. A mixed economy has its own characteristics in different countries and at different stages of development Thus, the mixed economy in the United States is characterized by the fact that state regulation is represented here to a much lesser extent than in other countries, because the size of state property is small.The main position in the US economy is occupied by private capital, the development of which with stimulated and regulated by state structures, legal norms, tax system. Therefore, here, to a lesser extent than in Europe, mixed enterprises are common. Nevertheless, a certain form of public-private enterprise has developed in the United States through a system of government laws.
Each economic system has its own national models of economic organization. Let's consider some of the most famous national models of economic systems.
American model is built on a system of encouragement, entrepreneurial activity, development of education and culture, enrichment of the most active part of the population. Low-income segments of the population are provided with various benefits and allowances to maintain a minimum standard of living. This model is based on a high level of labor productivity and a mass orientation towards achieving personal success. The problem of social equality does not stand here at all.
Swedish model is characterized by a strong social orientation, focused on reducing wealth inequality through the redistribution of national income in favor of the poorest segments of the population. This model means that the function of production falls on private enterprises operating on a competitive market basis, and the function of ensuring a high standard of living (including employment, education, social insurance) and many elements of infrastructure (transport, R&D) - on the state.
The main thing for the Swedish model is the social orientation due to high taxation (more than 50% of GNP). The advantage of the Swedish model is the combination of relatively high rates of economic growth with a high level of full employment, ensuring the well-being of the population. Unemployment has been reduced to a minimum in the country, differences in the incomes of the population are small, and the level of social security of citizens is high.
Japanese model is characterized by a certain lag in the standard of living of the population (including the level of wages) from the growth of labor productivity. Due to this, they achieve a reduction in the cost of production and a sharp increase in its competitiveness in the world market. Such a model is possible only with an exceptionally high development of national self-consciousness, the priority of the interests of society to the detriment of the interests of a particular person, the readiness of the population to make certain sacrifices for the sake of the country's prosperity. Another feature of the Japanese development model is associated with the active role of the state in the modernization of the economy.
The Japanese economic model is characterized by advanced planning and coordination between the government and the private sector. The economic planning of the state is advisory in nature. Plans are government programs that orient and mobilize individual parts of the economy to fulfill national tasks. The Japanese model is characterized by the preservation of its traditions and at the same time actively borrowing from other countries everything that is needed for the development of the country.
Russian model of transitional economy. After the long domination of the administrative-command system in the Russian economy in the late 1980s and early 1990s. began the transition to a market economy. The main task of the Russian model of transitional economy is the formation of an effective market economy with a social orientation.
The conditions for the transition to a market economy were notfavorable for Russia. Among them:
a high degree of nationalization of the economy;
the almost complete absence of a legal private sector with an increase in the shadow economy;
the long existence of a non-market economy, which weakened the economic initiative of the majority of the population;
distorted structure national economy, where the military-industrial complex played the leading role, and the role of other industries National economy has been reduced;
non-competitiveness of industries and agriculture.
Basic conditions for the formation of a market economyin Russia:
development of private entrepreneurship based on private property;
creation of a competitive environment for all business entities;
an effective state that provides reliable protection of property rights and creates conditions for effective growth;
Any society, no matter how rich or poor it is, decides three basic questions of the economy: what goods and services should be produced, how and for whom. These three fundamental questions of economics are crucial (Figure 1.1).
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Which of the possible goods and services should beproduced in the region and at the present time ? |
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What combination of production resourceswhat technology should be used to produce selected of the possible optionsgoods and services ? |
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Who will buy the selected goods and services,pay for them while benefiting? How should gross income be distributed?society from the production of these goods and services? For whom? |
Basic questions of economics
Which of the goods and services should be produced and in whichhow many? An individual can provide himself with the necessary goods and services in various ways: produce them on his own, exchange them for other goods, receive them as a gift. Society as a whole cannot have everything immediately. Because of this, it must decide what it would like to have immediately, what it would be possible to wait to receive, and what to refuse altogether. What needs to be produced at the moment: ice cream or shirts? A small number of expensive quality shirts or a lot of cheap ones? Is it necessary to produce less consumer goods, or is it necessary to produce more industrial goods (machinery, machine tools, equipment, etc.), which will increase production and consumption in the future?
Sometimes the choice can be quite difficult. There are underdeveloped countries that are so poor that the efforts of most of the labor force are spent only to feed and clothe the population. In such countries, in order to raise the living standards of the population, it is necessary to increase production volumes, but this requires the restructuring of the national economy, the modernization of production.
How should goods and services be produced? There are various options for the production of the entire set of goods, as well as each economic good separately. By whom, from what resources, with the help of what technology should they be produced? Through what organization of production? There is far from one option for building a specific house, school, college, car. The building can be both multi-storey and single-storey, the car can be assembled on a conveyor or manually. Some buildings are built by private individuals, others by the state. The decision on the production of cars in one country is made by a state body, in another by private firms.
For whom should the product be produced? Who canuse goods and services producedin the country? Since the quantity of goods and services produced is limited, the problem of their distribution arises. To satisfy all needs, it is necessary to understand the mechanism of product distribution. Who should use these products and services, benefit? Should all members of society receive the same share or not? What should be given priority to intelligence or physical strength? Will the sick and the old eat their fill, or will they be left to fend for themselves? Solutions to these problems determine the goals of society, the incentives for its development.
The main economic problems in different socio-economic systems are solved in different ways. For example, in a market economy, all answers to basic economic questions (what, how, for whom) are determined by the market: demand, supply, price, profit, competition.
“What” is decided by solvent demand, by the vote of money. The consumer decides for himself what he is willing to pay money for. The manufacturer himself will strive to satisfy the desires of the consumer.
The "how" is decided by the manufacturer, who seeks to make a big profit. Since price fixing does not depend only on him, in order to achieve his goal in a competitive environment, the producer must produce and sell as many goods as possible and at a lower price than his competitors.
"For whom" is decided in favor of different groups of consumers, taking into account their incomes.
Characteristics of a market economy
|
The main features of a market economy: the basis of the economy is private ownership of the means of production; variety of forms of ownership and management; free competition; market pricing mechanism; self-regulation of the market economy; contractual relations between business entities; minimum government intervention in the economy |
|
|
Main advantages: |
Main disadvantages: |
|
1) stimulates high production efficiency; 2) fairly distributes income according to the results of work; 3) does not require a large control apparatus, etc. |
reinforces social inequality in society; causes instability in the economy; indifferent to the damage that business can cause to people and nature, etc. |
Market economy of free competition formed in the 18th century, but a significant part of its elements entered the modern market economy.
The main features of the market economy of free competition:
private ownership of economic resources;
a market mechanism for regulating the economy based on free competition;
a large number of independent sellers and buyers of each product.
Modern market economy (modern capi talism) turned out to be the most flexible, it is able to rebuild, adapt to changing internal and external conditions. Its main features:
variety of forms of ownership;
development of scientific and technological progress;
active influence of the state on the development of the national economy.
Traditional economy - this is an economic system into which scientific and technological progress penetrates with great difficulty, because. conflicts with tradition. It is based on backward technology, widespread manual labor, and a mixed economy. All economic problems are solved in accordance with customs and traditions.
The main features of the traditional economy:
private ownership of the means of production and the personal labor of their owners;
extremely primitive technology associated with the primary processing of natural resources;
communal farming, natural exchange;
dominance of manual labor
Administrative command economy (centrally planned economy) is an economic system in which the main economic decisions are made by the state, which assumes the functions of organizing the economic activity of society. All economic and natural resources are owned by the state. The administrative-command economy is characterized by centralized directive planning, enterprises act in accordance with the plan assignments brought to them from the "center" of management.
The main features of the administrative-command economymiki:
basis - state property;
absolutization of state ownership of economic and natural resources;
rigid centralization in the distribution of economic resources and results of economic activity;
4) significant restrictions or prohibitions on private entrepreneurship.
Positive aspects of administrative-command economics
By concentrating resources, it can ensure the achievement of the most advanced positions in science and technology (the achievements of the USSR in the field of astronautics, nuclear weapons, etc.).
The administrative-command economy is able to ensure economic and social stability. Every person is guaranteed a job, stable and constantly increasing wages, free education and medical services, people's confidence in the future, and so on.
The administrative-command economy has proved its vitality in critical periods of human history (war, liquidation of devastation, etc.).
Negative aspects of the administrative-commandeconomy
Excludes private ownership of economic resources.
Leaves a very narrow framework for free economic initiative, excludes free enterprise.
The state completely controls the production and distribution of products, as a result of which free market relationships between individual enterprises are excluded.
mixed economy organically combines the advantages of a market, administrative-command, and even traditional economy and thereby, to a certain extent, eliminates the shortcomings of each of them or mitigate their negative consequences.
Russia was practically the first in the world to apply the experience of an administrative-command economy in the form of state socialism. At the present stage, Russia is beginning to use the basic elements of a mixed economy.
mixed economy- a type of modern socio-economic system that is taking shape in the developed countries of the West and some developing countries at the stage of transition to a post-industrial society. The mixed economy has a multistructural character, its basis is private property interacting with state property (20-25%) On the basis of various forms of ownership, various types of economy and entrepreneurship function (large, medium, small and individual entrepreneurship; state and municipal enterprises (organizations, institutions)). A mixed economy "is a market system with its inherent social orientation of the economy and society as a whole. The interests of the individual with his multilateral needs are put forward at the center of the country's socio-economic development. A mixed economy has its own characteristics in different countries and at different stages of development Thus, the mixed economy in the United States is characterized by the fact that state regulation is represented here to a much lesser extent than in other countries, because the size of state property is small.The main position in the US economy is occupied by private capital, the development of which with stimulated and regulated by state structures, legal norms, tax system. Therefore, here, to a lesser extent than in Europe, mixed enterprises are common. Nevertheless, a certain form of public-private enterprise has developed in the United States through a system of government laws.
Each economic system has its own national models of economic organization. Let's consider some of the most famous national models of economic systems.
American model is built on a system of encouragement, entrepreneurial activity, development of education and culture, enrichment of the most active part of the population. Low-income segments of the population are provided with various benefits and allowances to maintain a minimum standard of living. This model is based on a high level of labor productivity and a mass orientation towards achieving personal success. The problem of social equality does not stand here at all.
Swedish model is characterized by a strong social orientation, focused on reducing wealth inequality through the redistribution of national income in favor of the poorest segments of the population. This model means that the function of production falls on private enterprises operating on a competitive market basis, and the function of ensuring a high standard of living (including employment, education, social insurance) and many elements of infrastructure (transport, R&D) - on the state.
The main thing for the Swedish model is the social orientation due to high taxation (more than 50% of GNP). The advantage of the Swedish model is the combination of relatively high rates of economic growth with a high level of full employment, ensuring the well-being of the population. Unemployment has been reduced to a minimum in the country, differences in the incomes of the population are small, and the level of social security of citizens is high.
Japanese model is characterized by a certain lag in the standard of living of the population (including the level of wages) from the growth of labor productivity. Due to this, they achieve a reduction in the cost of production and a sharp increase in its competitiveness in the world market. Such a model is possible only with an exceptionally high development of national self-consciousness, the priority of the interests of society to the detriment of the interests of a particular person, the readiness of the population to make certain sacrifices for the sake of the country's prosperity. Another feature of the Japanese development model is associated with the active role of the state in the modernization of the economy.
The Japanese economic model is characterized by advanced planning and coordination between the government and the private sector. The economic planning of the state is advisory in nature. Plans are government programs that orient and mobilize individual parts of the economy to fulfill national tasks. The Japanese model is characterized by the preservation of its traditions and at the same time actively borrowing from other countries everything that is needed for the development of the country.
Russian model of transitional economy. After the long domination of the administrative-command system in the Russian economy in the late 1980s and early 1990s. began the transition to a market economy. The main task of the Russian model of transitional economy is the formation of an effective market economy with a social orientation.
The conditions for the transition to a market economy were notfavorable for Russia. Among them:
a high degree of nationalization of the economy;
the almost complete absence of a legal private sector with an increase in the shadow economy;
the long existence of a non-market economy, which weakened the economic initiative of the majority of the population;
distorted structure of the national economy, where the military-industrial complex played a leading role, and the role of other sectors of the national economy was reduced;
non-competitiveness of industries and agriculture.
Basic conditions for the formation of a market economyin Russia:
development of private entrepreneurship based on private property;
creation of a competitive environment for all business entities;
an effective state that provides reliable protection of property rights and creates conditions for effective growth;
Any society, no matter how rich or poor it is, decides three basic questions of the economy: what goods and services should be produced, how and for whom. These three fundamental questions of economics are crucial (Figure 1.1).
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Which of the possible goods and services should beproduced in the region and at the present time ? |
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What combination of production resourceswhat technology should be used to produce selected of the possible optionsgoods and services ? |
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Who will buy the selected goods and services,pay for them while benefiting? How should gross income be distributed?society from the production of these goods and services? For whom? |
Basic questions of economics
Which of the goods and services should be produced and in whichhow many? An individual can provide himself with the necessary goods and services in various ways: produce them on his own, exchange them for other goods, receive them as a gift. Society as a whole cannot have everything immediately. Because of this, it must decide what it would like to have immediately, what it would be possible to wait to receive, and what to refuse altogether. What needs to be produced at the moment: ice cream or shirts? A small number of expensive quality shirts or a lot of cheap ones? Is it necessary to produce less consumer goods, or is it necessary to produce more industrial goods (machinery, machine tools, equipment, etc.), which will increase production and consumption in the future?
Sometimes the choice can be quite difficult. There are underdeveloped countries that are so poor that the efforts of most of the labor force are spent only to feed and clothe the population. In such countries, in order to raise the living standards of the population, it is necessary to increase production volumes, but this requires the restructuring of the national economy, the modernization of production.
How should goods and services be produced? There are various options for the production of the entire set of goods, as well as each economic good separately. By whom, from what resources, with the help of what technology should they be produced? Through what organization of production? There is far from one option for building a specific house, school, college, car. The building can be both multi-storey and single-storey, the car can be assembled on a conveyor or manually. Some buildings are built by private individuals, others by the state. The decision on the production of cars in one country is made by a state body, in another by private firms.
For whom should the product be produced? Who canuse goods and services producedin the country? Since the quantity of goods and services produced is limited, the problem of their distribution arises. To satisfy all needs, it is necessary to understand the mechanism of product distribution. Who should use these products and services, benefit? Should all members of society receive the same share or not? What should be given priority to intelligence or physical strength? Will the sick and the old eat their fill, or will they be left to fend for themselves? Solutions to these problems determine the goals of society, the incentives for its development.
The main economic problems in different socio-economic systems are solved in different ways. For example, in a market economy, all answers to basic economic questions (what, how, for whom) are determined by the market: demand, supply, price, profit, competition.
“What” is decided by solvent demand, by the vote of money. The consumer decides for himself what he is willing to pay money for. The manufacturer himself will strive to satisfy the desires of the consumer.
The "how" is decided by the manufacturer, who seeks to make a big profit. Since price fixing does not depend only on him, in order to achieve his goal in a competitive environment, the producer must produce and sell as many goods as possible and at a lower price than his competitors.
"For whom" is decided in favor of different groups of consumers, taking into account their incomes.