As is known, any society, regardless of the type of social economic system, at all levels of the economy, solves three main interrelated problems:
- “what to produce?” - problem of choice;
- “how to produce?” - the problem of efficiency;
- “for whom to produce?” - distribution problem.
The solution to the first problem presupposes the need, in conditions of limited resources, to select the quantity, nomenclature and range of goods and services that must be produced in the economy. To solve the second, it is necessary to determine at which enterprises, from what resources and using what technology the products will be produced. The solution to the third problem is based on the principles and forms of distribution of the product created in society among consumers.
The need to solve these problems in any society is determined by the law of scarcity, the contradiction between limited resources and limitless needs. In conditions of limited resources, society is forced to make a choice between the production of various goods and services in order to satisfy the material needs of society to the maximum extent.
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Ticket 4 (The role of needs in economic development. Classification of needs. The law of increasing needs.)
Need in general- this is a special psychological state of a person, felt or recognized by him as “dissatisfaction”, a discrepancy between the internal and external conditions of life. Therefore, the need prompts activity aimed at eliminating the discrepancy that has arisen.
Economic needs- this is part of human needs, the satisfaction of which requires the production, distribution, exchange and consumption of goods and services. It is these needs that are involved in the active interaction between production and the unsatisfied needs of people. What is this interaction like?
In its turn economic needs have the opposite effect on production:
Firstly, they are an internal motivation and a specific guideline for creative activity.
Secondly, People's needs tend to change quickly in quantitative and qualitative terms. Because of this, economic needs often outpace production.
Third, the leading role of needs is manifested in the fact that they cause movement economic activity- from the lowest level to higher and higher ones.
Modern civilization(the current stage of development of the material and spiritual culture of society) knows several levels of needs:
Physiological (in food, water, clothing, housing, reproduction)
Content
Introduction
The practice of developed industrial and developing countries shows that not all functions necessary for the natural course of reproductive processes and ensuring a full-fledged life of society are implemented through market relations.
The relevance of this topic is due to the fact that the free market mechanism turns out to be imperfect from the point of view of ensuring macroeconomic stability, and market relations do not provide social guarantees to the population. The market turns out to be unable to solve the problem of ensuring economic and national security, social stability in society.
The negative consequences of the above factors and many other aspects of economic development have led to the recognition of the inadequacy of the “self-tuning” of the market environment.
Despite its enormous positive role, the market is not able to provide an effective solution to a number of strategic tasks of economic development and social problems. A market left to its own devices is characterized by anarchy and spontaneity, leading to economic losses and a decrease in business efficiency. The market aggravates the problem of social inequality, generates significant income differentiation, and property stratification of the population.
The first attempts to justify the imperfection of the market and its inability to produce enough goods of a certain kind were made by such economists as A. Smith, A. Marshall and A. Pigou. A. Smith formulated the economic functions of the state, A. Marshall and A. Pigou introduced the concept of “external effect” into scientific circulation. A. Pigou justified state intervention in the economy (Pigou tax) as a consequence of the discrepancy between private and public costs and benefits, which lead to the unattainability of the social optimum.
In Russian economic theory the problem of market imperfection is practically not covered in sections of microeconomics courses or within the framework of public sector economics, since it does not quite fit into the classical themes of the theory of a market economy.
Purpose course work is the study of market imperfections and problems of functioning of the modern economy. In accordance with the goal, it is necessary to solve the following tasks:
- consider the concept of market “imperfection”, its manifestations and reasons for its appearance; study methods of government influence on the market, as well as the functions of the state in the economy;
consider global economic problems; analyze the state of modern Russian economy, identify problems in its functioning.
Chapter 1. The concept of market imperfection and the role of the state in a market economy
- Market imperfection. Manifestations and causes of market imperfections
Market imperfections are deviations from conditions that ensure perfect competition.
The functions of the market make it, in principle, a very efficient system. However, this does not mean that market relations are completely perfect and ensure progressive economic development. The isolation of economic agents, the incomplete coincidence of their interests, and often antagonism inevitably lead to the aggravation of many contradictions.
It is necessary to distinguish market failure from its imperfection 1 . The market is an institution for transactions,which can take various forms, far from perfect competition. If insolvency is a manifestation of the insufficient efficiency of a competitive market while observing all the conditions of free competition, then market imperfection arises as a result of a change in the shape of the market by one or more sellers or buyers (monopolistic, monoposonic and other forms of market imperfection).Basically, market imperfections are associated with deviations from conditions that ensure perfect competition. In addition, the market economy is unable to ensure the production of important goods or creates them in insufficient quantities.
What are the imperfections, or, as they are often called, “failures” of the market?
1. The market is not able to resist monopolistic tendencies. In market conditions, monopolistic structures inevitably arise that limit freedom of competition. When the market environment is uncontrolled, monopolies are formed and strengthened. Unjustified privileges are created for a limited number of market participants.
To maintain extremely high prices, monopolists artificially reduce production. This makes it necessary to regulate prices, say, for the products of raw material monopolies, electricity, and transport.
2. The market is not interested in and is not capable of producing public goods (“public goods”). These goods are either not produced by the market at all or are supplied to them in insufficient quantities.
The peculiarity of public goods is that everyone can use them, but they do not have to pay for them. In addition, their use cannot usually be limited.
Everyone is required to use road signs regulating traffic rules in order to avoid undesirable consequences. Vaccination must cover all residents, otherwise it will not be possible to eliminate infectious diseases. Public goods are non-rival goods and services available to almost everyone.
Public goods are free to the consumer, but not free to society. The production of “free” goods involves costs that the market cannot bear.
The market cannot solve the problem of producing goods for public use, because it is impossible to limit their consumption, reconcile costs with “utility,” and eliminate inevitable collisions (for example, the “free rider” problem, defining categories of users). Satisfying the needs of society not directly related to business requires the creation of an appropriate institutional structure and direct participation of the state.
3. The market mechanism is unsuitable for eliminating external (side) effects. Economic activity in a market environment affects the interests of not only its direct participants, but also other people. Its consequences are often negative.
As social wealth increases, the problem of externalities becomes more acute. The increase in the number of cars in use is accompanied by air pollution. Pulp and paper mills are poisoning water sources. The widespread use of chemical fertilizers makes food unfit for consumption.
The market itself is unable to eliminate or compensate for the damage caused by externalities. Agreement between interested parties without external interference can only be reached in rare cases where the negative effect is insignificant. In practice, when serious problems arise, government intervention is necessary. It introduces strict standards and restrictions, uses a system of fines, and determines the boundaries that participants in economic activities do not have the right to cross.
4. The market does not have the ability to provide social guarantees and neutralize excessive differentiation in income distribution. The market by its nature ignores social and ethical criteria, i.e. fairness in the distribution of resources and income. It does not provide stable employment for the working population. Everyone must independently take care of their place in society, which inevitably leads to social stratification and increases social tension.
A “normal” market generates abnormal proportions of the distribution of created wealth. Market relations create favorable conditions for the manifestation of narrow selfish interests that give rise to speculation, corruption, racketeering, drug trafficking, and other antisocial phenomena.
5. The market mechanism generates incomplete and insufficiently perfect information. Only in a fully competitive economy do market participants have sufficiently comprehensive information about prices and prospects for production development. But competition itself forces firms to hide real data about the state of affairs. Information costs money, and economic agents - producers and consumers - possess it to varying degrees.
The lack of perfect information, incompleteness and uneven distribution of information create advantages for some and undermine the ability to make optimal decisions for others. Sellers and buyers, entrepreneurs and workers do not have equivalent information. Meanwhile, information is in some respects public good. The most complete and reliable information is provided not by the private market, but by government institutions. So, the market is not an ideal mechanism for regulating economic activity.
There are two reasons for market imperfections: the presence of private information (which only firms have), external shocks (the impact of which on the economic system cannot be predicted) and individual unforeseen innovations (which can change the direction of production in the most unpredictable way).
Imperfections (“failures”) of the market can be mitigated by the creation of appropriate institutional structures, state participation in the distribution of resources, and solving problems that cannot be provided by purely market instruments.
- Functions of the state in the economy
The state ensures the protection of the rights of producers and consumers; adopts laws ensuring property rights; counteracts the unlimited power of monopolies, develops antimonopoly legislation; takes sanctions against the sale of low-quality goods and false information about the activities of companies; improves the functioning of the market by creating a stable environment in the country.
The state bears the costs of defense, maintenance of law enforcement agencies, roads, etc. It incurs costs for certain types of insurance, associated, for example, with production activities: in case of unemployment, old age, etc.
The state monitors the state of the environment and the disposal of industrial waste and makes certain expenses for this.
The state subsidizes healthcare, education, and various charitable programs.
The market mechanism itself gives rise to a number of problems that require government intervention 3 . These include the problem of fair distribution of income. For the market, the most characteristic distribution is that corresponding to investments in production factors. Disabled, sick, and other incapacitated citizens remain outside of this distribution. The state is necessary to ensure the right to work for those who can and want to work. A market economy is inevitably associated with unemployment.
State intervention in the economy pursues certain functions. As a rule, it corrects those “imperfections” that are inherent in the market mechanism and which it itself is either unable to cope with, or this solution is ineffective. The role of the state in a market economy is manifested through the following critical functions:
- Creation legal basis for adoption economic decisions. The state develops and adopts laws regulating business activities, determines the rights and responsibilities of citizens;
- stabilization of the economy. The government uses fiscal and monetary policies to overcome the decline in production, smooth inflation, reduce unemployment, and maintain stable level prices and national currency;
-socially oriented distribution of resources. The state organizes the production of goods and services that are not handled by the private sector. It creates conditions for the development of agriculture, communications, transport, determines spending on defense and science, forms programs for the development of education, healthcare, etc.;
- ensuring social protection and social guarantees. The state guarantees a minimum wage, old-age pensions, disability pensions, unemployment benefits, various types of assistance to the poor, etc.
1.3. Methods of government influence on the market
The following areas of government intervention in the economy are known: micro-, macro- and interregulation 4.
The main instruments of microregulation are taxation, accelerated depreciation, impact on prices, and antitrust regulation.
For example, in accordance with antimonopoly policy, monopolies are defined, the processes of formation of monopolistic associations are regulated, and criminal sanctions against guilty persons are regulated. In the practice of states with developed market economies, antimonopoly regulation is implemented as follows. To limit the growth of the scale of production and sales, firms legally limit the size of their market quota. In the countries of the European Union, in order to reduce the number of mergers and acquisitions of one company by another, mandatory registration of all agreements on the merger of companies is practiced.
As for taxes, they are also used to stimulate or restrain the development of enterprises. Preferential taxation makes it possible to recover costs at low market prices. The most common types of final benefits are: tax-free minimum income, tax rebates, complete exemption from certain taxes, reduced tax rates.
Macroregulatory instruments are financial and tax regulation of production levels, unemployment and inflation; creating a legal basis for making economic decisions, stabilizing the economy; programming and economic forecasting, fiscal and monetary policy; income regulation policy; social policy, public entrepreneurship.
Interregulation includes state trade policy, management exchange rate, a system of foreign trade tariffs and benefits, licensing of foreign trade, etc.
Government regulation can be direct, i.e. carried out through legislative acts and executive actions based on them, and indirect, i.e. based on the use of various financial (fiscal and monetary) levers, with the help of which the government has the opportunity to influence the behavior of private firms and enterprises with a certain degree of efficiency.
Direct intervention is expressed in the fact that the state, having capital, provides loans in a wide variety of forms, takes equity participation, and is the owner of enterprises.
Among the methods of government regulation, there are no completely unsuitable and absolutely ineffective ones. All are needed, and the only question is to determine for each those situations where its use is most appropriate. Economic losses begin when authorities go beyond the bounds of reason, giving excessive preference to either economic or administrative methods.
It must be borne in mind that among economic regulators there is not a single ideal one. Any of them, while bringing a positive effect in one area of the economy, will certainly have negative consequences in others. Nothing can be changed here. The state that uses economic regulatory instruments is obliged to control them and stop them in a timely manner.
So, this chapter examined the concept of market imperfection, its manifestations and causes. The functions of the state in the economy are studied, as well as methods of state influence on the market, which are divided into micro-, macro- and inter-regulation. In turn, the main instruments of microregulation are taxation, accelerated depreciation, impact on prices, and antitrust regulation. Macroregulatory instruments are financial and tax regulation of production levels, unemployment and inflation; creating a legal basis for making economic decisions, stabilizing the economy; programming and economic forecasting, fiscal and monetary policy; income regulation policy; social policy, public entrepreneurship. Interregulation includes state trade policy, exchange rate management, a system of foreign trade tariffs and benefits, foreign trade licensing
Chapter 2. Problems of functioning of the modern economy
2.1. Global problems of the world economy and their signs
Global problems of the world economy are problems that concern all countries of the world and require resolution only as a result of the joint efforts of members of the world community.
All global problems have a number of common features:
- are of a global nature, i.e. affect the interests and destinies of everything (or, according to at least, majority) of humanity;
threaten humanity with serious regression in living conditions and further development productive forces (or even the death of humanity as such);
need an urgent and immediate solution;
interconnected;
For their solution, they require joint action of the entire world community.
Let's look at a number of problems.
Globalization is a mechanism that is based on processes of a purely liberal nature, which, as a rule, leads to sharp distortions in the structure and order of functioning of the world economy as a whole, in its individual spheres and spatial areas. This is manifested, in particular, in the strengthening and toughening of competition between the vast majority of economic entities due to the intensification of the flow of innovations and the rapid loss of competitive advantages. There is also an increasing danger of aggressive monopolization of entire markets and industries by TNCs, which, in turn, leads to their competition in wider segments and territories of the world economy - with other TNCs, national states and their unions, as well as all together - in global financial markets. markets 6.
In general, this state of affairs leads, along with the receipt of material, financial and geopolitical dividends by the wealthiest minority, mainly from developed countries, to a catastrophic stratification of the population in terms of level and quality of life both in individual countries and between rich and poor countries, to cultural degradation - in various aspects across all countries, to economic and financial instability and crises, undermining state institutions, ethnic, political, military conflicts, etc.
Global food problem. If we consider it in a broad sense, it is the production, distribution, exchange and consumption of food in the world and in individual countries (political economy of food). In a narrow sense, this is the provision of food to the population of the world and individual countries and regions.
First of all, the food problem is directly related to environmental conservation. The development of the agricultural sector depends on the state’s concern for agricultural production and the rational use of resources available in society - material, financial, natural and labor.
The solution to a production problem depends on social policy states. Providing the population with food is largely determined by the presence and activities of trade unions and public organizations in the country. The supply of food to the population is determined by the degree of economic development of society, in particular the level of labor productivity of society in agricultural production. As labor productivity increases, the possibility of increasing food production increases and the severity of the food problem may decrease.
The food problem is affected by many economic interdependencies, such as the relationship between: income and expenditure, individual economic sectors, different countries, macroeconomic stability and food stability, economic opportunity and equity in the distribution process, women's empowerment and fertility decline, political incentives and government policies , wars and economic impoverishment.
Environmental issues have evolved widely over the last century. The most important signs of this crisis are: global climate change and the emergence of the greenhouse effect.
As a result of the unprecedented scale of human impact on the environment, the expansion of human activity beyond the planet into outer space, and the involvement of all elements of the biosphere in the production process, the ozone layer of the planet is decreasing, which can lead to global warming, melting of Arctic glaciers, flooding of a significant part of the populated areas of the Earth, to increased destructive power of hurricanes, tropical cyclones, and storms.
Every year about 10 thousand floods, landslides, hurricanes, thousands of earthquakes, hundreds of volcanic eruptions, and tropical cyclones occur on our planet. Over the past 20 years, about 3 million people have died as a result of these natural disasters. With the further deepening of the environmental crisis, the number of victims from natural disasters will increase.
The result of neocolonial policies in developing countries, in particular, the policy of “price scissors” for raw materials, is the massive destruction of forests, especially tropical ones, which makes their reproduction impossible and leads to the expansion of deserts. According to the World Resources Institute, floods periodically destroy the established lives of more than 1 billion people. The shortage of wood fuel, the depletion of soil and water sources, and the decline in agricultural production are directly or indirectly caused by the destruction of tropical forests.
Fuel, energy and raw materials problems. The use of fuel, energy and raw materials on our planet is growing at a significant pace. For each inhabitant of the planet, about 2 kW of energy is produced, and to ensure generally accepted standards of quality of life, 10 kW is needed. This figure has only been achieved in some of the most developed countries peace. In this regard, and also due to the further growth of the planet's population, the irrational use of energy, raw materials, the uneven distribution of fuel and energy resources among different regions of the world, their production and consumption will continue to increase.
However, the planet's energy resources are not limitless. At the planned rate of development of nuclear energy, the total reserves of uranium will be exhausted in the first decade of the 21st century, but if energy consumption occurs at the energy level of the thermal barrier, then all reserves of non-renewable energy sources will burn out in 80 years. Therefore, from the point of view of material content, the main reason for the aggravation of the fuel and energy problem is the increase in the scale of involvement of natural resources in economic circulation and their limited quantity on our planet. From the point of view of social form, such a reason is the relations of monopolistic property, which determine the predatory exploitation of natural resources.
The irrational use of energy resources is largely caused by the neocolonial policies of imperialist states, in particular, the “policy of cheap raw materials”, which is bleeding the economies of developing countries.
The place and role of developing countries in the world economy. One of the most pressing global problems is overcoming backwardness developing countries 7. These countries were formed as a result of the collapse of the colonial system. These include former colonial, semi-colonial and dependent countries in Asia, Africa and Latin America. Currently there are about 150 of them out of 230 countries in the world. More than 50% of the world's population lives in these countries.
To general economic features Their national economy includes, firstly, a low level of development of productive forces; secondly, the monocultural nature of agriculture and the hypertrophied development of certain industries working for export; thirdly, the diversity of the economy with a predominance of those structures that are based on a natural form of economic management; fourthly, the dominance of pre-capitalist forms of ownership; fifthly, the presence of certain forms of government intervention in the economy; sixth, the extremely low standard of living of the majority of the population.
The use of weapons of mass destruction is global. The arms race is a huge danger to humanity, not only as a threat of nuclear war. About 700 billion dollars are spent on it annually, which is equal to the labor costs of approximately 100 million man-years. A significant part of the territory is allocated for military bases; about 25 million people are employed in the regular troops alone. The production and buildup of huge arsenals of weapons causes irreparable harm to the environment.
Particularly dangerous are the storage and burial of nuclear waste, chemical and bacteriological production waste, accidents at military factories, and combat aircraft with nuclear and hydrogen bombs.
Along with the threat of thermonuclear weapons, the threat of environmental weapons (provoking earthquakes, tsunamis, violation of the ozone layer over enemy territory), and the militarization of space are becoming real.
The most common reason for the exacerbation of global problems associated with the development of a technological method of production is the intensive growth in recent decades of the planet's population, or the so-called demographic explosion, which is also accompanied by uneven population growth in different countries and regions. If during 1 million years of the existence of human civilization the population of the planet reached 1 billion people, then its increase to 2 billion occurred after 120 years, 3 billion - after 32 years (1960). In March 1976, the world's population had already reached 4 billion people, and at the beginning of 1989 the 5 billion mark was overcome. According to UN experts' forecasts, at the beginning of 2000 the population of our planet reached 6 billion, and by 2100 there will be 12-13 billion people.
First of all, it adversely affects economic development the world and individual countries and regions. In order to feed, clothe, and provide housing for an ever-growing number of people, it is necessary to constantly increase the production of industrial and agricultural products, increase the volume of mining, etc. As a result, the Natural resources, the average temperature on Earth is increasing, the environment is being polluted, etc. The demographic explosion is accompanied by uneven population growth in different countries and regions, with the highest population growth observed in countries where the productive forces are poorly developed, as a result of which mass hunger and poverty prevail. The demographic explosion is causing an exacerbation of such global problems as food, environmental, raw materials, and energy.
Also, the reason for the exacerbation of global problems is also the rapid urbanization of the population, the increase in giant megacities, which is accompanied by rapid motorization and reduction of agricultural land. In general, 40% of the population is concentrated on 0.3% of the planet's territory.
2.2.Main problems of the modern Russian economy
Over the past eight years, the Russian economy has significantly exceeded the indicators of the late 1990s, and in 2007 Russia entered the world's seven leaders in terms of GDP at purchasing power parity, ahead of countries such as Italy and France 8 .
Over eight years, GDP grew by 72%, reaching 1 trillion 330 billion rubles. The net inflow of capital into the Russian Federation in 2007 amounted to $82.3 billion, which is a record. In 2006, capital inflows were almost half as much - $42 billion.
Accumulated volume foreign investment has grown 7 times over the past 8 years. Russia's external debt has dropped to 3% of GDP (this is one of the lowest levels in the world).
The main economic indicators of the standard of living of the population are presented in Appendix 1.
Salaries and pensions increased faster than inflation, which suggests an increase in real incomes of the population. However, one very important task has not yet been solved - reducing the gap between the poor and the rich.
An analysis of the distribution of the population by average per capita income showed (see Appendix 1) that in 2007, compared to 2004, the share of the population with monthly income up to 2000 rub.
The largest share in the income structure in 2007, namely 19.1%, is occupied by citizens with incomes from 10,000 to 15,000 rubles. The number of citizens with an income level above 25,000 rubles has increased, for example, in 2006 their share was 3.1%, while in 2007 it was 10.1%.
However, the so-called “funds ratio,” the ratio of the incomes of the richest and poorest 10% of the population, has even increased slightly. If the target level was 14.4 times, then in 2007 this coefficient reached 15.3.
The country's socio-economic development program until 2020 involves a transition to an innovative development path. This path should ensure an increase in the efficiency of the Russian economy through a fourfold increase in labor productivity. This scenario involves the development of high-tech sectors of the economy - aircraft and shipbuilding, the transport system, energy, and the financial system.
However, despite all of the above, there are systemic problems in the functioning of the modern Russian economy, first of all this inflation , monopolization, bureaucracy and corruption 9.
Ensuring macroeconomic stability and reducing inflation are the main conditions for the economic development of Russia 10 .
The main problem is still high inflation, but its causes stem from a complex of factors:
- increase in budget expenditures;
labor productivity noticeably lags behind the dynamics of real wages;
rising prices for energy resources on global markets;
influx of foreign investment;
low level of competition in certain areas.
In addition, the logical consequence of the “distorted” policy of the Central Bank is the negative level of real interest rates, contributing to the rapid growth of lending and, ultimately, consumption, which pushes inflation up. Also, in such conditions, there are risks of investment inefficiency, especially with such impressive state support.
etc.................
Features of competition in the labor market.
Lecture 2. Functioning of the labor market.
The functioning of the labor market and the behavior of all its participants largely depends on the nature of the competition that develops in it.
Competition is the struggle between people and groups of people for the acquisition of rare goods (goods, services, resources), the acquisition of which requires sacrifices in the form of giving up other goods.
Competition in the labor market is between:
Hired employees for workplaces and positions;
Employers for workers (especially highly qualified ones);
Employers and employees (trade unions for terms of employment);
Between states for highly qualified labor.
The labor market in each country is divided into segments that are often almost unrelated to each other, so there is:
Competition within a certain segment of the labor market between workers of the same skill level - intra-firm and inter-firm competition;
Intra-company competition between employers offering similar jobs;
Inter-segment competition - implies the need to overcome inter-segment segments (industry and territorial), both for employees and employers.
In the labor market, as in other workers, one can distinguish between price and non-price competition, fair and unfair.
Price competition is directly related to the level of remuneration for labor.
Non-price competition - associated with their nervous productivity, as well as with recent transfer opportunities by employers " market signal» about your work qualities and capabilities.
Fair competition occurs within the bounds of law and ethical standards.
In cases of unfair competition, these norms are violated.
Economic theory of labor Special attention pays attention to the study of aspects of market functioning that are related to the degree of restriction of competition, i.e. with the presence of monopoly power of one of the parties.
Theoretical aspects functioning of the labor market:
There are such a large number of sellers and buyers of labor that none of them is able to influence its price or market wages.
Equality of workers (their qualifications and productivity) and jobs.
Independent and independent of anyone’s pressure or interference is the choice of participants in labor transactions.
No barriers preventing workers from moving to new jobs
Equal income of all labor market participants to inflation, combined with zero costs of obtaining it.
In a competitive labor market, a firm faces a perfectly elastic supply of labor. For the market as a whole, the supply line has its usual slope.
The process of establishing, maintaining, and restoring equilibrium in the labor market can, on the one hand, be analyzed within the framework of traditional microeconomic models, and on the other hand, the characteristics of the labor market and its subjects require a more detailed consideration of the process and the effects that arise here. It should be noted that in short and long-term periods, the demand for labor and its supply have different elasticity coefficients.
In the short term it is lower, in the long term it is higher. Accordingly, the establishment of market equilibrium and its maintenance under changed conditions require the superstructure of the market using government methods of regulation.
In response to changes in supply and demand, the labor market will respond with corresponding changes in wages and employment. How quickly can these changes occur, i.e. How quickly the labor market finds a new equilibrium depends on the flexibility of the labor market.
The flexibility of the labor market depends on the mobility of workers, the degree of flexibility of labor regimes and working hours, and the possibility of producing costs associated with changes. The labor market will not be flexible if wage and working hours are strict, and mobility work force low.
Adjusting the equilibrium in the labor market can be carried out in different ways depending on a number of circumstances, in particular on the extent to which workers and employers are able to negotiate with each other, maintaining a balance of interests. If a worker can only communicate dissatisfaction with his job to his employer by quitting, then adjusting the equilibrium in the labor market is called an exit mechanism.
Restoring equilibrium in the labor market can occur differently: with the help of the “voice” adjustment mechanism. It is based on the fact that the employer and employees exchange information and this allows the employer to respond to changing situations in time, thereby avoiding losses due to the dismissal of employees. Thus, with the help of the “voice” mechanism, working conditions are regulated, and with the help of the “exit” mechanism, the level of labor is regulated.
MINISTRY OF EDUCATION OF THE REPUBLIC OF BELARUS
EE "BELARUSIAN STATE ECONOMIC UNIVERSITY"
Department of Economic Theory and
stories economic studies
Course work
on the topic: “Competition in the market mechanism. The problem of creating a competitive environment in the conditions of emerging market economy in the Republic of Belarus"
| Introduction………………………………………………………………………………… | |
| 1. The institution of competition in the system market institutions 1.1. Basic theories of competition. Four market models……………… | |
| 1.2. Types of competition……………………………………………………… | |
| 1.3. Methods and forms of competition…………………………………………………………… | |
| 1.4. The impact of competition on the market……………………………………………………….. | |
| 2. Foreign practice antimonopoly regulation and development of the competitive environment……………………………………………………….. | |
| 3. Problems of developing competition in the Belarusian market…………………. | |
| Conclusion…………………………………………………………………………… | |
| List of sources used……………………………………………………………….. | |
| Applications…………………………………………………………………………………... |
INTRODUCTION
The concept of competition is fundamental in the economic theory of market relations. Competition manifests itself at all levels of the capitalist economy - from the micro level (firm) to the global economic system. Even the creators of socialism, condemning some forms of competition, tried to introduce it into the socialist economy, calling it “socialist competition.” The economic success (and often survival) of a subject of a market economy primarily depends on how well he has studied the laws of competition, its manifestations and forms, and how ready he is for competition.
Competition is the main mechanism modern market. Creating a competitive environment is the most important condition for the functioning of a market economy. In the early 90s, Belarus took fixed rate to build market economy, abandonment of the state monopoly and development of competition. However, for the past 10 years, Belarus has faced and continues to face serious problems in creating a competitive environment. The complete state monopoly that existed in the country for more than 70 years, natural monopolies and their social significance - all this significantly complicates the process of creating a competitive environment in the economy of the Republic of Belarus. At the same time, today we can already talk about significant progress in Belarus in terms of building a competitive environment.
Thus, we can rightfully say that competition issues are of great relevance today, both at the macroeconomic and microeconomic levels.
Competition is the cure for stagnation in production, the key to the economic power of producers and the state as a whole. Therefore, it is necessary to research the topic of competition as best as possible.
The purpose of this course work is:
1) find out the concept and essence of competition, determine its types and how they affect development national economy.
2) establish how competition (positively or negatively) affects the economy and producers in various market situations.
3) consider the antitrust policies of countries with developed economies
4) determine how competition is developed in the Republic of Belarus, and what measures are most effective for this in our country.
The above tasks will help to define and analyze the process of competition, as well as the place and role of competition in the economic mechanism. Let us take a closer look at the problem of competition, its types, place and role in the modern economic mechanism.
The following literary sources were used in the work: “ Transition economy: essence, problems, features in Belarus” by Lobkovich ; « Economics: Principles, Issues and Policies” by McConnell, Brew; "Principles economic science» Marshall; Porter's "International Competition"; Smith's Inquiry into the Nature and Causes of the Wealth of Nations; Statistical Yearbook of the Republic of Belarus.
1. INSTITUTION OF COMPETITION IN THE SYSTEM OF MARKET INSTITUTIONS
1.1. Basic theories of competition. Four Market Models
Competition like economic phenomenon, appeared during the establishment of trade relations and acquired its usefulness with the advent of free market relations. At the same time, the most comprehensive theoretical provisions about the driving forces of competition appeared. And the main merit for this is the classical political economy, and its main representative A. Smith. He viewed competition as a matter of course, permeating all sectors of the economy and limited only by subjective reasons.
A. Smith identified competition with the “invisible hand” of the market - the automatically equilibrium mechanism of the market. He proved that competition, equalizing profit rates, leads to the optimal distribution of labor and capital, a regulator of private and public interests. The “invisible hand” can operate successfully only in conditions of sufficiently intense competition. The mechanism of competition forces the entrepreneur to constantly look for ways to reduce production costs, otherwise it is impossible to reduce the price and increase profits due to increased sales volume.
Although A. Smith did not consider the specific elements of the market mechanism that often interfere with the achievement of the optimum, he did take the first step towards understanding competition as effective remedy price regulation:
Based on the theory of competitive prices, he formulated the concept of competition as rivalry that increases (when supply is reduced) and decreases prices (when there is excess supply);
Identified the basic conditions for effective competition, including the presence large quantity sellers, comprehensive information about them, mobility of resources used;
For the first time he showed how competition, by equalizing profit rates, leads to the optimal distribution of labor and capital between industries;
Developed elements of the perfect competition model and theoretically proved that in its conditions maximum satisfaction of needs is possible;
Made a significant step towards the formation of the theory of optimal resource allocation under conditions of perfect competition.
However, for the “system of natural liberty” to function, there must be freedom to compete. The market, Smith notes, will be saturated necessary goods at the lowest possible price, and employment and increased prosperity will be ensured if producers and traders compete without the privileges of a monopoly. A monopoly on the domestic market brings the greatest benefit to merchants and manufacturers, but it destroys competition, because allows you to earn more not as a result of productive labor, but as a result of a privileged position in the market
Free competition, theoretical basis which A. Smith postulated completely excludes any conscious control over market processes. The coordinating element in his theoretical provisions is the price system in a completely decentralized economy.
D. Ricardo, developing the ideas of price regulation of the market through competition, built the most impeccable theoretical model of perfect competition, with the functioning of the market system in the long term. This approach allowed us to get away from the “details” associated with government regulation, monopoly power, geographical features market, etc., which are not of decisive importance in the long term.
For the conditions considered by D. Ricardo, it is fundamental that prices are formed only under the influence of supply and demand as a result of competition. Competition plays a decisive role in establishing price balance. The generalizing element of the study was the “law of markets”, which postulates the tendency of an equilibrium state at full employment.
Significant results complementing the model of perfect competition, but from the position of the law of value, were proposed in Capital by K. Marx. In his opinion, competition, by regulating the distribution of capital between industries, contributes to the tendency of the rate of profit to decrease, the formation of an average rate of profit.
Neoclassical school presented even more accurately and completely the influence of perfect competition on the price system. The economy of Western society became increasingly centralized and free price regulation, at this stage of development, was put into practice as never before, attracting the attention and inspiration of many famous economists. The neoclassical concepts of A. Marshall can be considered especially significant in this sense. Developing the basic principles of the classics, he more consistently and fully substantiated the mechanism for automatically establishing equilibrium in the market with the help of perfect (pure) competition and the operation of laws marginal utility and ultimate performance. However, A. Marshall went much further. He was the first to criticize the “conventions” of the pure competition model. The development of a theory for analyzing partial and long-term stable equilibrium in the market, as well as taking into account the development of technology and consumer preferences when determining relative prices, made it possible to create the foundations of the theory of a new model of competition - monopolistic.
During economic reforms Russia has created the necessary prerequisites for the development of competition in commodity markets. As a result of objectively occurring economic processes and measures taken by the state to reduce the share public sector in the economy, reducing the scope of government regulation and administrative management of enterprises, demonopolizing the economy and developing competition within industry and regional programs, price liberalization and foreign economic activity certain conditions have emerged for the formation of a competitive environment in product markets. The formation of many of them no longer requires constant and direct intervention government agencies in the activities of economic entities.
At the same time, the state of the competitive environment in various regional and industry markets is extremely heterogeneous. In the most important structure-forming sectors for the economy, the market is monopolistic, oligopolistic, or in a state of monopolistic competition. In many markets, significant structural and administrative barriers remain that protect the dominant enterprises operating in them from the healthy forces of competition (horizontal dominance, vertical integration, regional segmentation, exclusive, including informal, relations between sellers and buyers, institutional and regulatory restrictions on the entry of new subjects).
Of course, such a market structure inevitably leads to monopolistic actions on the part of individual market participants in the form of both individual abuses of dominant position and anti-competitive agreements. For example, markets for oil industry products have varying degrees of development of competitive relations: from subjects natural monopoly in the field of oil transportation to the crude oil market; which on a national (and even global) scale can be assessed as a market with developed competition. However, the largest share in the industry's activity is occupied by oil refining and the sale of petroleum products. If we consider this market as a national one, it can be considered an oligopoly, since the main entities in it are vertically integrated oil companies.
The category of oligopolistic and monopoly markets also includes markets for metals (especially non-ferrous), electricity, communication services, gas, and railway transportation. In the markets for communication services and electricity, there is a kind of regional structural monopoly, since they are organized according to the principle of “one subject Russian Federation-- one operator,” and pricing is carried out with the participation of authorities of the constituent entities of the Federation.
Strategic objectives of the state antimonopoly policy in the most systematized form were reflected in the medium-term program for the socio-economic development of the country, approved by Decree of the Government of the Russian Federation of March 31, 1997 No. 360. The program identified the specific tasks of the antimonopoly authorities of the Russian Federation:
improvement of the competition law system, forms and methods of antimonopoly control and regulation:
countering the creation of new monopoly structures, strengthening control over sectoral economic concentration:
extension of antimonopoly regulation and control requirements to financial markets, including banking and insurance markets, and the securities market:
strengthening antimonopoly regulation in the field of natural monopolies:
development and implementation public policy demonopolization:
overcoming the departmental-bureaucratic nature of monopolism:
application of protective measures in foreign trade and support for domestic producers:
protection of intellectual property and prevention of unfair competition in this area:
strengthening the integration of the activities of national and international antimonopoly authorities:
Many of these areas of antimonopoly policy have already been implemented to one degree or another, but this does not mean that a full-fledged competitive environment and a highly effective law enforcement system have been created in Russia. To further maintain the course towards the development of competition, it is necessary to both strengthen the antimonopoly policy itself and the system of antimonopoly authorities, as well as implement measures of general economic policy that help create conditions for the development of competition, facilitate the entry of new entities into markets and eliminate structural dominance. First of all, we are talking about further liberalization of economic life in general, be it the rules of access to real estate or land, legislation and licensing practice, the taxation system or the foreign trade regime. The judicial system needs significant improvement so that it effectively protects private property rights and helps resolve business disputes. Proper government regulation transport tariffs, since it helps to overcome the territorial disunity of economic entities and the regionalization of markets. A sign of a competitive economy is the completeness of information about the market, competitors, prices, available to an economic entity and necessary for it to make economic decisions, therefore an important component of state competition policy is the creation (promotion of the creation) of appropriate information systems. Finally, constant government action is needed to eliminate administrative barriers in entrepreneurial activity, eradication of corruption, and protectionism” i.e. factors that significantly distort the market situation.
Ways to solve the problem:
Ability to use resources more efficiently;
Cause the need to react flexibly and quickly adapt to changing production conditions;
Create conditions for optimal use scientific and technical achievements in the field of creating new types of goods, etc.;
Ensure freedom of choice and action for consumers and producers;
Aim manufacturers to meet the diverse needs of consumers and improve the quality of goods and services.