MINISTRY OF EDUCATION AND SCIENCE OF THE RF
GOU VPO "BASHKIR STATE UNIVERSITY"
Department of General Economic Theory
COURSE WORK
on the topic: “The state in a market economy”
Completed by: 1st year student
Faculty of Economics gr. 1.6 B
Checked by: Ph.D., Associate Professor.
Introduction…………………………………………………………………………………3 pages.
1. The need for state intervention in the economy...4 – 7 pp.
2. Goals, directions and methods of state regulation of the economy………………………………………………………….……8 – 14 pp.
3. Features of the modern economic policy of the Russian state…………………………………………………………….15 – 26 pp.
II. Workshop……………………………………………………...…27 – 30 pp.
III. Conclusion…………………………………………………………….31 p.
IV. Literature……………………………………………………………..32 pp.
Introduction
In real economic life, there is a huge number of economic entities(people, firms, enterprises). Coordination of the activities of these entities, which are not organizationally related to each other, in order to achieve an overall positive effect in development national economy is the root problem of any society economic system.
Studying the economic role of the state is an integral part of economic education. It is unlikely that anyone today will try to prove that a modern market economy can develop without government intervention. Currently, it is difficult to imagine a society where the state would not carry out active budgetary tax policy, wherever it regulates the sphere financial relations, did not address social and other important problems.
The relevance of this topic is undeniable, because modern development market relations in the economy requires the active participation of the state as a regulatory and management body. The state acts as a subject of regulation and management of the economic system in the person of individual bodies vested with appropriate powers. In my opinion, the state must constantly balance, either increasing or decreasing the degree of intervention. The market system is, first of all, flexibility and dynamism in decision-making, both on the part of consumers and on the part of producers. State policy simply does not have the right to lag behind changes in the market system, otherwise it will turn from an effective stabilizer and regulator into a bureaucratic superstructure that slows down the development of the economy.
The purpose of analyzing the role of the state in a market economy is to clarify the reasons, goals and limits of state intervention in the market economy.
To achieve the goal, the following tasks were set:
1. find out the reasons for state intervention in the market economy;
2. determine the methods, functions and goals of state regulation of a market economy;
3. show the features of state regulation of the market economy in Russia at the present stage.
1.1 Reasons for government intervention in a market economy
There are many reasons that cause the objective need for government intervention in the market economy, among these reasons we can highlight existing monopolies; the presence of numerous goods that are either not offered by the market or are offered in small quantities; the presence of external effects; overly commercial distribution of income.
First of all, the role of the state in preserving and maintaining the market environment itself should be recognized. It is the state, through legal regulation, that ensures the establishment and observance of the “rules of the game” of the main economic agents, legislatively defines and protects the rights of owners, promotes the preservation of competitive principles in the economy, suppresses forms of unfair competition, and regulates many parties economic activity etc. The state provides normal functioning monetary system, which is especially important in the context of the abandonment of the gold standard. Elements of coercion, which are inevitably present in legal regulation, at first glance, limit the freedom of implementation and the primacy of private interests, which are rightfully considered the foundation of a market economy. In fact, coercion turns out to be a way to reduce transaction costs (R. Coase) - the costs of negotiating, obtaining reliable information, the costs of risky actions of private structures, which would be extremely high in the absence of state control and guarantees. Such coercion is carried out by the state in the interests of all major economic entities and society as a whole.
Next important reason State intervention in the market system of self-regulation is an inevitable market tendency towards monopolization, resulting from the laws of competition, concentration and centralization of capital. The ambiguity of the consequences of monopolization (on the one hand, rising prices, costs, reduction in production volumes, irrational distribution of resources and income, in some cases, immunity to scientific and technical progress; on the other hand, cost reduction due to economies of scale, interest in scientific research and the financial capabilities of carrying out the latter, the ability to break into world markets) also creates a very contradictory attitude of the state to the assessment of the activities of monopolies. It is to the extent that a monopoly is destructive for the economic system that it becomes the object of state influence - through legal restriction and suppression of monopolistic activities (price regulation, division of firms), through encouraging competition, promoting the creation of new enterprises, and implementing an open economy policy.
The reason for the participation of the state in the economic life of society is also the problem of externalities. Their essence is that the activities of market-type enterprises can have both negative and positive consequences that do not have, but actually affect the well-being of other members of society. These are, for example, external effects associated with environmental pollution as a result of production activities, the depletion of natural reserves due to their increasing involvement in economic turnover, the emergence of regional and structural imbalances in production, and so on.
Of course, the market mechanism “by itself” is not capable of neutralizing these negative consequences, because it focuses the economy solely on the ever-increasing effective demand. Therefore, the regulation of external effects must necessarily be undertaken by the state. It does this by measuring them and organizing the redistribution of income through the state budget in order to repay negative externalities or fairly redistribute the benefits received from positive externalities (for example, irrigation works initiated by one producer, but the positive results are shared by many).
Elimination of negative external effects is also possible through direct administration, i.e. banning the exploitation of some irreplaceable natural resources, the use of harmful technologies, the production of goods and services that are harmful to human health, etc. Those found guilty of violating such prohibitions are subject to fines that are many times greater than the possible benefits to the manufacturer. The state is not alone in its fight against negative externalities. He is helped by numerous consumer protection societies, a free press, and institutions of representative democracy.
All this makes it possible to significantly adjust the operation of the market mechanism, mitigate or completely eliminate the negative consequences of the blind play of market forces, manifested in external effects.
Another justifiable reason for government intervention in the economy is the need to produce so-called public goods. In economic theory, public goods are goods that have the following basic properties: non-excludability - goods cannot be provided to one person without making them available to other people; non-rivalry - being provided to one person they can be provided to others without additional costs. The production and supply of such goods by private firms turns out to be unprofitable, if not impossible at all: most people will use such goods for free, and the problem of “hares” will arise. “Pure” public goods, for which the indicated properties are fully applicable, include national defense, lighthouse services, street lighting, etc. Some goods are characterized by a partial absence of the properties of exclusion and competition - these are “quasi-public” goods: protection of public order, public parks, roads, etc. Sometimes such goods also include education, medicine, and cultural sectors, although these are rather private goods with high positive external effects. Public goods, due to their properties, are produced either by the state or by state contractors and are provided for use free of charge and financed from the state budget. But at the same time, a very difficult problem is determining the volumes of production of goods and the corresponding expenditure of resources; the traditional market mechanism for identifying equilibrium volumes and prices does not work here.
The problem of income distribution also requires state participation. The market mechanism, as we know, is very cruel and is not capable, and should not, solve issues of social justice or guarantee a certain standard of welfare in accordance with the requirements of a modern democratic society. The state corrects this situation with the help of fiscal policy instruments: taxes, transfers, etc.
There are other problems that require government intervention that the market is also unable to solve. This includes large investment projects that do not promise immediate profit and are associated with great risk, uneven regional development, the need to fight inflation and monopoly, and much more.
So, on the one hand, the market represents the best, i.e. most effective method economic organization of all known to history, and on the other hand, it has very significant shortcomings that can and should be neutralized or mitigated with the help of various forms of government intervention, political and public organizations. That is why a regulated market economy is considered a normal economy everywhere, in which the problem of combining self-regulation of market relations with their adjustment in accordance with social priority values is more or less successfully solved.
It is no coincidence that an integral property of a market system is its multi-sector nature, i.e. variety of forms of ownership and economic activity. The share of each form is determined only by market efficiency and is not the same in different countries.
In a planned economy, the state plays a decisive role in determining all economic proportions. When building a system of state regulation of the economy, the principle of “maximum opportunity” prevails here: all economic processes that, in principle, are amenable to centralized regulation must be managed by central authorities. What is common to all countries with planned economies is that the system government controlled appears as the main regulator of economic proportions, whereas in countries with a market economy it always performs auxiliary functions.
There are important restrictions on government regulation of the economy. Any actions of the state that destroy the market mechanism (planning, absolute control over prices) are unacceptable, and the state should not limit competition in the market by its actions.
1.2 Minimum necessary and maximum permissible limits of state intervention in the market economy
It is obvious that a modern market system is unthinkable without government intervention. However, there is a line beyond which market processes become deformed and production efficiency decreases. Then, sooner or later, the question arises of denationalizing the economy, ridding it of excessive state activity. There are important limitations to regulation.
The functions performed by the state in organizing money circulation, providing public goods and eliminating the consequences of externalities constitute the maximum limits of its intervention in the free market economy. At the same time, these functions form the minimum necessary regulatory boundaries real market. There is no such thing as an unregulated market, because even an ideal free market needs some influence from the state.
If we turn to a real competitive market, we will find new areas of economic life where the limitations of the market mechanism are manifested, which makes it necessary for broader government participation in economic processes. The totality of such areas determines the maximum permissible limits of government intervention in the economy. Let us designate these spheres.
Redistribution of income. The market recognizes as fair the income received as a result of free competition in the factor markets; the amount of income depends on the efficiency of factor investment. There are people in society who own neither land, nor capital, nor labor. They have nothing to present to factor markets, they do not participate in competition, and do not receive any income. These people include children, the unemployed, and the elderly. Even for people who demand one or another factor of production, market distribution does not guarantee a minimum income that ensures a standard of well-being. In all of these cases, the state has the right to intervene in the redistribution of income. Here, the minimum limit of state intervention is flexible; it is influenced by the current state of the economy, the standard of living in the country, which determines consumer stereotypes. And the maximum limit is determined by the following: size social payments, which must be consistent with the capabilities of the state; the size of taxes should not undermine the economic incentives of owners of production factors; when determining the volume and timing of social payments. benefits need to take into account the negative effects work force and the market mechanism as a whole.
Employment. The market mechanism does not automatically realize the right to work for those who can and want to work. For efficient work the market requires an optimal labor reserve. For a number of reasons, unemployment is inevitable in a market economy, which poses many difficult problems for the state. Its responsibility becomes to regulate the labor market in order to maintain a certain level of employment and provide material support for people who have lost their jobs or were unable to find them.
The development of basic scientific research and related large investments with long payback periods, high degrees of risk and uncertainty regarding profits is practically beyond the power of the market mechanism. This cannot be done without the participation of the state, which stimulates structural policy and scientific and technological progress. On the contrary, the market works effectively when developing promising species new technology and technology.
The implementation of national interests in the global economy presupposes the implementation by the state of an appropriate foreign trade policy, control over the international migration of capital and labor, influence on exchange rates, management of balances of payments, etc.
These are the upper maximum permissible limits of government intervention in the market economy. This framework is wide enough for a reasonable symbiosis of government regulation and an effectively functioning market mechanism to solve the main socio-economic problems of modern society.
If the state tries to do more than what is allotted to it by the market economy, it continues to distribute production resources, maintain administrative control over prices, and forgives enterprises credit debt, preserves jobs in technologically backward industries, tries to provide high social protection of the population without taking into account the real possibilities of the economy, then the backward structure of production, low quality of products is preserved in the national economy, the gap with developed countries in area scientific technical progress and the standard of living of the people. Then, sooner or later, it becomes necessary to rid the economy of excessive government activity, which is accompanied by negative consequences. So-called flaws or “failures” of the state appear. The flaw of the state is its inability to ensure the effective distribution of resources and socio-economic policy in accordance with the ideas of justice accepted in society.
1.3 Methods and functions of state regulation of a market economy
The implementation of government regulation is carried out using a wide range of methods. Methods of state regulation are a system of methods and norms by which the state regulates economic relations. They are usually divided into economic and administrative.
Economic methods predominate. They represent a set of special tools with the help of which the state indirectly regulates economic processes. These are methods that stimulate the development of individual subjects of the national economy or their production (indicative planning, monetary, tax and budget system etc.), i.e. they are economic stimulants or inhibitors.
Among economic methods, monetary policy is primarily distinguished. The main instruments of monetary policy are the required reserve ratio, the interbank interest rate, discount rate, Central Bank operations with government bonds on the securities market. These instruments allow the state to adequately resist inflation, regulate interest rates, and through them the investment process, production and employment, and have a tangible impact on stock price movements.
A significant role is played by tax policy, without which it is not possible to effectively stimulate economic growth and organize the distribution of income. Tax regulation is complemented by government spending policy, which helps to implement structural transformations of production, smooth out regional imbalances, and alleviate the problem of forced unemployment. Economic methods of government regulation do not limit the freedom of entrepreneurial choice.
An important place in the influence of the state on economic processes is occupied by state entrepreneurship. The essence of this method is that the state acts as a large entrepreneur. The scope of public entrepreneurship is quite wide, but it is mainly developed in industries where the payback period and capital intensity are relatively high (energy, transport, communications, mining, i.e. industries that are less attractive to private entrepreneurship). Reasons for growth public sector in the economy are the need to maintain national defense, infrastructure support for macroeconomic processes, population growth, urbanization, environmental protection, etc.
As the market economy develops and becomes more complex, the role of government programming increases. Governments began to formulate their main tasks at certain stages in the form of state programs. To implement them, economic centers are being created with the involvement of scientists, representatives of central banks, business unions, and trade unions. Such programs are approved by parliament, where reports on the progress of their implementation are required.
Economic methods of state regulation are aimed mainly at the national economy. At the same time, the state has at its disposal other, no less effective regulators that influence the country’s position in the world economy. Their importance increases the deeper the country is integrated into the system of world economic relations.
To stimulate exports, the state uses a variety of economic methods: provides tax benefits to exporters; undertakes guarantees of export loans, uses trade and economic agreements. A strong means of encouraging exports is the regulation of the exchange rate and the export of capital.
Administrative methods of regulation are a set of measures established by government authorities to permit, prohibit, coerce and limit the activities of economic entities. Such methods include supporting or restricting private business, providing certain areas (enterprises) with benefits, subsidies and preferences, or, conversely, establishing strict or restrictive sanctions for certain areas and firms.
In addition, state regulation of the economy can be carried out through state orders to individual firms or corporations for the production of certain socially important products or services. These could be orders for the production of military equipment, for the construction of roads and housing.
Administrative methods of regulation are widely used in foreign economic activity. By regulating export-import operations (by establishing quotas and customs duties), the state regulates the import and export of goods and thereby contributes to limiting or, conversely, developing certain industries in the country.
Administrative methods of regulating the economy include direct state control over a monopoly market.
Administrative regulation is necessary when developing strict standards that guarantee the population life in conditions of environmental safety, when establishing a guaranteed minimum wage and unemployment benefits. And also in the development of regulations aimed at protecting national interests in the system of world economic relations. The use of direct methods here is considered economically justified and, in general, does not contradict the principles underlying market relations.
The distinction between economic and administrative methods is to some extent arbitrary. In order to use any economic method, preliminary administrative decision relevant government agencies. IN in this case any economic methods bear the stamp of administration. At the same time, any administrative method, while directly forcing business entities to perform certain actions, simultaneously has an indirect impact on a number of interrelated processes. Any administrative methods contain features characteristic of economic methods.
The state must use only those methods, the use of which is this moment can only bring positive effects.
The role of the state in a market economy is manifested through its functions. The activities of the state are aimed at achieving the general goal - the welfare of man, his moral and physical well-being, maximum legal and social protection of the individual.
Economic functions modern state quite diverse and complex. Each function of the state has a subject-political characteristic. Its content shows what is the subject of the state’s activities, what means it uses to achieve a particular goal.
Two groups of regulatory functions of the state can be distinguished:
a) The functions of ensuring the legal basis for the functioning of the market, as well as the function of stimulating and protecting competition, as the main driving force in the market environment;
b) Functions of income redistribution, adjustment of resource distribution, ensuring economic stability, economic growth
The main regulatory functions of the state are as follows:
· stimulation of balanced economic growth;
· providing employment;
· price regulation;
· Creation legal basis;
· distribution of resources;
· provision social protection;
· labor market regulation;
· preservation and improvement of the environment;
· implementation of national interests.
The list of state functions is by no means exhausted. The state, trying to solve problems beyond the control of the market, implements antimonopoly policy in order to maintain competition, ensures freedom of enterprise, law and order in economic life, stimulates business activity and the use of existing scientific and technical results. The state always retains the organization of monetary circulation and social insurance, carrying out deep structural transformations of production, resolving issues of fundamental science, producing public goods, providing assistance to unprofitable but important industries, ensuring the stability of the national currency, control of foreign economic activity, including the organization of the customs system and a lot others.
Thus, the main directions of economic activity of the state are:
1. Ensuring normal operating conditions of the market mechanism, which involves regular demonopolization of the economy, its anti-inflationary prevention with the help of stable monetary policy, maintaining a deficit-free system of public finance, etc. In countries that have taken the path of restoring a market economy, the state also has to form a multi-sector economy, dismantle the links of administrative command control, form an effective system of economic regulators, and much more.
2. Performing functions outlined by the minimum necessary and maximum permissible limits of state intervention in the economy. In solving these economic problems, the market mechanism reveals its failure or inefficiency.
3. Development, adoption and organization of implementation of economic legislation, i.e. legal basis of entrepreneurship, taxation, banking system and others.
CHAPTER 2. ROLE OF THE STATE IN THE MARKET ECONOMY OF RUSSIA
2.1 Analysis of the main macroeconomic indicators of Russia for 2007 – 2009
In the context of the global crisis, when the price of oil falls, Russia’s export revenues decrease significantly, which, in turn, changes the situation with the budget and the dynamics of GDP.
The price of oil began to actively decline at the end of 2008; in December it fell below 40 dollars. per barrel. The prerequisites for the continuation of the crisis are already visible. The fall in industrial production in November 2008 compared to November 2007 was 8.7%. As a result of the reduction in volumes construction work production of construction materials decreased in October by 4.1%, and in November by 14.9%. Stagnation is expected at the end of the year.
The main decline is observed in export-oriented raw materials industries: chemical complex(74.2% - November 2008 to November 2007), metallurgical (86.7%), wood processing and production of wood products (81.4%), pulp and paper production (85%).
In December 2008, GDP decreased by 0.7% compared to December 2007. Experts say the main reasons for the decline in GDP are the fall in household incomes and investments in the country’s economy. At the same time, economists note that it was possible to slow down the decline in GDP in December 2008 only due to an increase in budget expenditures.
In December 2008, compared to December 2007, investments in fixed capital decreased by 2.3%, while in November they increased by 3.9%. The main reason for the reduction in investment is the inaccessibility of bank financing against the backdrop of rising interest rates and a liquidity shortage, largely provoked by the step-by-step devaluation of the ruble. Following the fall in investment, real disposable income of the population decreased by 11.6% in December 2008 (in November 2008 the reduction was 6.2%, and in 2008 - an increase of 2.7% after an increase of 12.1% in 2007 year). However, according to Dmitry Belousov from the Center for Macroeconomic Analysis and Short-Term Forecasting, the reduction in real expenses is difficult to estimate. Rosstat calculates income from expenses. That is, expenses minus savings plus the increase in cash and currency. Growth cash currency Rosstat estimates it very poorly, so it is better to start from the dynamics of real wages. Real wages in December 2008 decreased by 2%, while in November 2008 there was an increase of 3.9%. In 2008 real wages grew by 9.9% against growth of 17.2% in 2007.
According to most analysts, 2009 will be the most difficult year for the global economy. The recession in the leading countries of the world will lead to a drop in demand for energy resources, which will not be compensated by the planned reduction in supply.
The State Duma has already adopted the 2009-2011 budget, the full implementation of which requires the following indicators: pace GDP growth in 2009 should be at the level of 7.5%, in 2010 and 2011 - at the level of 8.0%, the price of Urals oil in 2009 - 95 dollars. per barrel, in 2010 - 90 dollars. per barrel, in 2011 - 88 dollars. per barrel, the ruble to dollar exchange rate in 2009 was 24.7 rubles, in 2010 - 26.0 rubles and in 2011 - 27.3 rubles. It is already obvious that these indicators are unattainable. At the end of the year, Prime Minister Vladimir Putin demanded that economic departments recalculate the main budget indicators based on the changed economic conditions. So, in new budget a lower oil price will be assumed - $41 per barrel. The main expenditure items in the budget will remain unchanged, which means that it will face a deficit. According to Finance Minister Alexei Kudrin, “in 2009, not only will there be a budget deficit, but its magnitude will be significant given the need for anti-crisis measures. In 2010, the deficit should not exceed 5% of GDP, and in 2011 - 3% of GDP.” By preliminary calculations Ministry of Finance, budget revenues in 2009 will amount to 6.5 trillion. rub. Two scenarios are presented: expenses - 9.6 trillion. rub. (deficit - 7.6% of GDP) and 9.4 trillion. rub. (7% of GDP). According to the Ministry of Finance, the Russian budget deficit in 2009 could reach up to 4 trillion. rubles if the price of oil drops to $32 per barrel.
According to most experts, based on an analysis of the current situation in the Russian and global economy, the peak of the crisis in Russia will occur in the first half of 2009; a decline in production, a decrease in investment, and consumption are expected. The economy will begin to recover in 2010, with recovery starting in the fourth quarter of 2009. During the recovery period, the growth rates of the economies of the world's leading countries will be lower than pre-crisis levels.
In order to analyze the behavior of the Russian economy in 2009-2010, it is necessary to predict changes in energy prices, in particular oil. Many experts give different estimates. If optimistic forecasts appeared back in November, some participants oil industry hoped that average cost for oil for 2009 will be over $70. But with the progress of trading on the global oil market and the worsening situation in the American and world economies, observers do not expect a price higher than $50, while the most optimal estimate is $30-40. Thus, earlier Finance Minister Alexei Kudrin predicted average price for oil in 2009 at the level of 50 dollars. per barrel, but already in January the government considered a price of $41 as the basis for recalculating budget parameters, while the authorities are also considering the possibility that the price would drop to $30.
Economists' estimates of future GDP dynamics also changed from optimistic to pessimistic as the crisis developed. Back in October-November estimates independent experts And officials ranged from 3-6%, in December more and more observers expect a drop in the growth rate of gross product. There are also radical estimates, for example, the director of the Institute of Globalization Problems, Mikhail Delyagin, promises a 15% drop in GDP in 2009 according to a pessimistic development scenario.
Table 1
Dynamics of GDP growth rates, inflation, real disposable income and consumer demand, %, 2003-2010
Industry will suffer the most from the crisis in the structure of future GDP. All experts predict negative growth rates in industrial output. The basic forecast of the Ministry of Economic Development, released at the end of December 2008, included a decline in industry of 3.2%, but already in January the government announced that in 2009 production would fall by 5.7%.
In recent years, a trend has emerged for the active development of trading activities. During the crisis, the trade sector, unlike the industrial sector, will continue to grow. Against the backdrop of a fall in GDP in December 2008, trade increased by 4.4% compared to December 2007. In 2009, the growth rate of trade should be about 4%.
2.2 Main trends and forecasts of state regulation of the market economy in Russia
Currently, Russia adheres to the raw material model of development. Moving along this path is associated with significant economic and political risks, caused not only by a possible drop in carbohydrate prices. The measures taken by the government to reduce these risks and amount to the creation of financial reserves can only give a short-term effect, and in the event of a serious change in world market conditions, the country will sooner or later still find itself in a difficult situation. In Russia it is necessary to use a model of social economic development, based not on cheap labor, but on a high standard of living (model of a socially oriented market or social market economy), successfully implemented in Germany and other European countries, Japan and partly in the USA. It is based on stimulating domestic demand as the main factor in the growth of national production, and its priority tasks are improving the quality of life of the population, creating social programs and democratic institutions.
The main goal of the socio-economic policy of the Russian state should be to triple the income of Russian citizens by 2020 based on accelerated GDP growth at the level of 10 - 12% per year and exceeding the average European (EU - 15) GDP per capita. But such a goal can be achieved only if a significant part of domestic demand is reoriented from growing imports to products of the domestic processing sector, and barriers to the development of non-commodity business are eliminated. To do this, the state’s economic policy must be concentrated on the following areas, which are united in the “Business Russia Program 5+5”, which contains five main areas of activity and five priority blocks of measures.
1.Building an effective social market model. The effectiveness of the social market model is based on three components:
a mass competitive market, a business that takes on most of the social burden in society; by creating jobs, it ensures the material well-being of workers; by paying taxes, he fills the state social system through the budget, the goal of which is to provide a decent standard of living for those who are not able to do it themselves;
social institutions, which include public-private systems pension provision, general and vocational education, social and health insurance, independent trade unions, etc.;
Institute of Charity.
In Russia, the majority of jobs are still created by the state and super-large businesses, market institutions are not yet sufficiently developed.
The development of a market social system is a complex strategic task, but the priority measures towards its implementation could be:
· further implementation and improvement national projects, gradual restructuring of their individual areas into the form of public-private funds endowment capital under the control of an independent public council and professional management company;
· development and adoption of measures for the development of primary and secondary vocational education, including allowing the deduction from the taxable income tax base of 50% of the cost of company expenses (but not more than 10% of pre-tax profit) for training specialists in licensed educational institutions;
· return from taxation (at the expense of the unified social tax) to insurance forms of replenishment of the Pension Fund and social insurance funds, simultaneous introduction of state benefits for old age and complete or partial disability to ensure decent living conditions for the non-working population at the expense of the budget;
· change in the procedure for placing assets of the state Pension Fund: expansion of the list of securities and permission to invest PFR assets in SFIR securities and shares Russian companies, formation of a supervisory board of the Pension Fund of Russia with the participation of representatives of public organizations, holding a tender to select a management company to manage the assets of the Pension Fund of Russia;
· increase in resource base and increase financial stability non-state pension funds, development of alternative mechanisms for pension savings, including using corporate schemes;
· gradual increase in retirement age;
· completion of monetization of benefits, including within Federal program additional drug provision for preferential categories of citizens (DLO);
· gradual development minimum wage lo level of subsistence level, complete transfer of the right to set the minimum size wages in the regions, tripartite commissions (state - trade unions - employer);
· fair, efficient and non-inflationary use of excess income from natural rent in the interests of all citizens and the national economy, including income from the placement of Fund funds national welfare;
· tax incentives for charitable activities, adoption of the law “On Charity”.
2. Development of a mass competitive market. The main sources of taxes, investment and economic growth in Russian economy There remain two dozen large companies, although according to the laws of the market the economy should develop on the basis of the private entrepreneurial initiative of millions of people, subject to competition from hundreds of thousands of small ones. Medium and large companies. This will largely determine the potential for economic growth and the possibility of solving social problems and the development of civil society, as well as the future stability of democracy and guarantees of the country's sovereignty.
Given the massive nature of the subjects of such a policy, it is impossible to apply a selective approach to them, as in the case of super-large companies. This requires a comprehensive system of measures of a general economic nature. First of all, it is necessary to remove the barriers standing in the way of business development in Russia.
A) Creating favorable conditions for doing business by demopolizing the economy, ensuring freedom of competition, protecting property rights, establishing a fair judicial system and implementing the following priority measures:
· reduction tax burden to the level of 30 - 35% due to the transition from the credit to the direct method of calculating VAT on the actual added value created by the company, reducing the rate of this tax from 18 to 12%, as well as by reducing the rate of the single social tax from 26 to 12% with simultaneous abolition a regressive scale for its payment - benefits for the rich; a 50% reduction in the tax on profits reinvested in production development, including in the purchase of foreign technologies;
· modernization of the tax administration system: transition from a quarterly to an annual accounting reporting system; cancellation tax accounting and radical simplification tax reporting; carrying out all checks more than one, including counter and desk checks, only by court decision. Transition to a new accounting reporting system that complies with international standards.
b) Reducing the administrative burden on business from both tax and other administrative authorities. As a first step, it is proposed to introduce a system of mandatory reporting to the Prosecutor's Office of the Russian Federation of all inspections of commercial and non-profit organizations, as well as individuals by any government agencies other than law enforcement; granting the right to refuse to conduct an inspection in the absence of such registration.
V) Assisting businesses in providing affordable investment resources and defense capital through the implementation of the following priority measures:
· giving the Central Bank legislative order functions financial assistance economic growth; stimulating the lending activity of banks through the maximum development of the refinancing system; establishing, as a temporary measure, the Central Bank's refinancing rate at a level below inflation; recognition of the volume of loans issued by it in the refinancing system as one of the main indicators of the Central Bank’s work; significant simplification for banks that receive loans in the refinancing system; expansion of the lists of assets accepted as collateral for loans;
· creation of mutual guarantee pools, when the Central Bank undertakes to provide any of their participants with a loan secured by assets from the list formed by the pool, and its participants undertake a consolidated obligation to repurchase the collateral from the Central Bank in the event of failure to repay the loan by the borrowing participant;
· further development SFID: Development Bank, federal and regional investment funds, regional guarantee agencies, Russian Venture Company, etc.; creation of an agency to provide state guarantees for part of the cost of equipment purchased by Russian consumers and leasing companies;
· Stimulating development stock market by eliminating the tax on dividends on shares purchased during an initial public offering; expanding the presence of institutional investors (pension funds, insurance companies) in the stock market; development of stock market infrastructure: creation of a central depository, consolidation professional participants market; streamlining the system of regulation of the stock market based on coordination of the activities of the Bank of Russia, the Federal Financial Markets Service, the Federal Insurance Service, as well as the delegation of part of the supervisory functions to an authoritative self-regulatory organization; adoption of laws “On Insider Information”, “On Securitization of Assets”, “On Holdings”;
· Amendments to tax code of the Russian Federation, partially exempting from taxation income directed to non-state pension funds(with the goal of accelerating the development of non-state pension funds as the most important sources of “long-term money” in the economy).
G) Protecting the national producer through the implementation of a new customs tariff policy:
· Simplification of the system of import customs duties: the introduction of five groups of goods with a single customs tax rate within each group, while duties should increase as they move along the technological chain (the first two groups are duty-free): raw materials, licenses, information goods and services; investment goods (equipment, means of production); food and intermediate raw materials; consumer goods; luxury goods and promotional goods;
· In order to stimulate the processing of raw materials, establishing export duties on commodities and goods of the first level of processing (roundwood, metals, main types of mineral fertilizers) using the mechanism operating for oil and petroleum products.
3.Innovation and industrial policy. It is an integral part of state economic policy and is aimed at stimulating the development of industries, regions and projects that can have a cumulative impact on other sectors of the economy and ensure an increase in the supply of domestic goods and services, diversification of the economy and the rapid modernization of fixed assets, and the solution of social problems. Thus, this policy promotes the capitalization of comparative competitive advantages Russian economy.
To make innovation and industrial policy systemic, it is necessary to determine its main directions, including using the methodology of foresight (Foresight). According to most preliminary estimates, at present, the “growth point” in the Russian economy should primarily be identified in the following areas:
· processing of raw materials (oil and gas chemistry, deep timber processing);
· knowledge-intensive industries and the military-industrial complex;
· housing construction and housing and communal services;
· agro-industrial complex;
· transit communication between Europe and Southeast Asia, which will contribute not only to the generation of additional income, but also to the accelerated development of the regions of Eastern Siberia and the Far East.
To expand existing and form new territorial production complexes, stimulate the development of regional and local industrial clusters, it is necessary to implement specific projects within the framework of innovation and industrial policy, using government co-financing instruments investment projects through the SFIR system and public-private partnership mechanisms. For these purposes it is necessary:
· introduction of an incentive depreciation rate of up to 150% of the cost of purchased equipment using standards accelerated depreciation;
· complete or partial exemption of newly created enterprises from paying individual species taxes ( tax holidays and loans), establishing guarantees against an increase in the tax burden;
· introduction of additional property tax benefits for newly purchased equipment.
4. Infrastructure development. When implementing relevant programs, it is necessary to take into account high corruption risks and the inefficiency of the existing management system. Today the government recognizes the need to implement large-scale infrastructure projects. In this case, public-private partnership mechanisms should play a major role.
5. Modernization of the management system. Public and private investments create significant risks of corruption and inefficient use of funds, so the introduction of new modern, non-corrupt management methods is required. The world has created mechanisms based on project management methodology that can largely neutralize corruption risks. If there is appropriate will on the part of the government, they can be successfully applied in the implementation of state economic policy.
It is possible, without destroying the old system, to create new management centers operating on the principles of focus on the final result, non-corruption, professionalism and personal responsibility.
We should start with organizing a management system for individual areas of national projects. Their implementation must be carried out within the framework of the Unified Action Plan. Each target project must be implemented according to project management methodology, have clearly defined goals, and a plan focused on a clear result that can be expressed in specific indicators.
Professional Russian and foreign management companies should be involved in organizing management on a tender basis. The implementation of each target project must be controlled by the state and society (supervisory boards).
The proposed “5+5 Program” will require significant financial and organizational resources. At the same time, it is impossible to allow a violation of macroeconomic stability and destabilization of the budget system. The program can be financed from the following sources:
· effective budget planning, stopping the bloating of the state apparatus, rationalizing military spending, reducing corruption in spending budget funds, increasing the efficiency of managing accumulated reserves, including investing a certain share of them within the country;
· issue and placement of government securities both on the international and domestic markets;
· attracting private (Russian and foreign) investment, including under government guarantees.
The government of the country needs to understand that behind positive economic indicators there are often problems that seem insignificant today, but will certainly appear during the next election cycle.
Conclusion
Issues discussed in course work, are devoted to the problems of state regulation of the economy, the role of the state in market relations.
The market is a well-oiled mechanism, despite its spontaneous nature, capable of solving the main economic problems facing society. However, this is not always the case. Therefore, government regulation of the market is necessary. The following mechanisms of government regulation are used: production of public goods, minimization of negative and promotion of positive externalities, intersection of asymmetric information, protection of competition, smoothing of macroeconomic fluctuations, income maintenance policy.
Active intervention in the economy is a normal phenomenon in the life of any state. As the social division of labor grows and economic relations become more complex, the economic role of the state grows. The period of opposition between the market and the state, and the state against the market, is over. Today it is obvious that the market effectively solves the problem of allocating limited resources, but it cannot satisfy all human needs, especially his social needs. Therefore, the state cannot be considered as a force opposing the market. Both the market and the state are capable of expressing the interests of society and the individual; they ultimately serve the needs of people.
Both the state and the market are two parallel developing and interacting forms of social development. Therefore, when deciding to carry out economic activity, one has to compare both the advantages and disadvantages of market and state mechanisms regulation of the economy.
The state is called upon to exercise control over the activities of all structural links of the market infrastructure and promote the efficiency of their work.
The main directions of government intervention are the formation of the legal and institutional market environment, economic, entrepreneurial and investment climate, as well as organization, support and control of the activities of market infrastructure.
List of used literature
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19. Economic theory: Textbook / N.I. Bazylev, M.N. Bazyleva, S.P. Gurko et al.; Ed. N.I. Bazyleva, S.P. Gurko. 3rd ed., revised. and additional – Mn.: BSEU, 2007. – 752 p.
Project within the framework of innovation and industrial policy
Objects of government intervention
Neoclyssical theories
Great depression
Classical theory
Mercantilist school.
Economic role state market economy
History of the presentation of the role of the state in the economy.
Tasks, objects and economic functions in a market economy
Forms and methods of government intervention in the economy
Mercantelists, through their teaching, proclaimed the strengthening of the role of the state in a market economy
Underestimating the role of the state. The state is the “night watchman”
Keynes: Strengthening the role of the state in the economy
Reducing the role of the state in the economy, but it is necessary to create good condition for private entrepreneurs (they themselves can saturate the market)
Tasks of state regulation
1. Ensuring economic growth
2. Reducing violations in monetary terms
3. Export support
4. Investing in production
1. Farm structure
2. Balance of payments
3. Environment
4. External economic relations
5. Regulation of the business cycle
6. Regulatory structures of the economy
7. Money circulation
8. Personnel training
Economic factors states
1. Creation of a legal basis for decision-making (creation of laws that regulate the rights and obligations of the state)
2. Stabilization of the economy (using credit tax state can overcome the decline in production. Reduce unemployment, support stable level prices and national currency.)
3. Socially oriented production of goods and services (creates the conditions for the development of the economy, transport. Determines spending on defense, science, forms health care and education programs)
4. Providing social protection and social guarantees (minimum salary guaranteed. Unemployment benefits, pension, etc.)
Forms of intervention:
1. Budget financial policy
2. Revenue regulation policy
4. External economic policy
5. Economic programming
1. Administrative
2. Legal
3. Economic
All methods are divided into direct and indirect
Direct methods - do not give the object of regulation the opportunity for manipulation and choice of solution
2. Control over income
3. Price control
4. Export and import quota
5. Licenses for other activities
Indirect - give the object the opportunity to choose when making a decision
1. Bank interest
2. Norms of state reserves
3. Government procurement
4. Customs duties
Topic6
Monetary credit system and monetary policy of the state
Questions
1. Concept and types of monetary systems
2. Money supply and its structure
3. Essence, principles, functions, forms of credit
4. Credit and banking system of the state and its structure
5. State monetary policy
Question No. 1
A business is a business enterprise that operates for the purpose of generating income (profit). It involves investing in your own business or borrowed capital, the income from which is spent not just on personal consumption, but to expand production activities. A business is a supplier of goods and services in a market economy.
The government is provided mainly by various budgetary organizations, which do not aim to make a profit, but implement the functions of state regulation of the economy.
The same person (an adult member of society) can be part of a household, a business, or a government agency. For example, as a government employee, you are a representative of a government organization; By owning securities of a corporation, you represent a business; By spending your income for personal consumption, you are a member of the household. Accordingly, a modern market economy is a whole system of markets: goods and services, labor, loan capital, securities, foreign exchange markets and etc.
The most important conditions for the emergence of a market are the social division of labor and specialization. The first of these categories means that in any more or less numerous community of people, none of the participants in the economy can live on complete self-sufficiency of all production resources, all economic benefits. Different groups of producers are engaged in separate types of economic activities. This means specialization in the production of certain goods and services. Specialization, in turn, is determined by the principle of comparative advantage, i.e. the ability to produce products at a relatively lower opportunity cost. This category is one of the central concepts in economic theory. Producers have different skills, abilities, and are provided with limited resources in different ways. The principle of comparative advantage explains both the processes of specialization within an individual enterprise and on an international scale.
A condition for the emergence of a market is the so-called economic isolation of subjects of a market economy. After all, completely independent producers, autonomous in making economic decisions, exchange goods created on the basis of the social division of labor and specialization. Economic isolation means that only the manufacturer himself decides what to produce, how to produce it, to whom and where to sell the created products. An adequate legal regime for the state of economic isolation is the regime of private property.
For the emergence of a market for any product, the magnitude of transaction costs is also important. Transaction costs determine the conditions and boundaries of market activity.
And finally, an important condition for the emergence of a market is the free exchange of resources. After all, social division of labor, specialization and exchange can also exist in hierarchical systems, where the Center determines who and what to produce, who and with whom to exchange resources and manufactured products. Only free exchange that exists in spontaneous (spontaneous) corridors allows the formation of free prices, which will prompt economic agents in the most effective directions of their activities.
No one denies the need for the state to perform certain functions in the economic sphere. However, on the questions in what proportions should state and market regulation be combined, what are the boundaries and directions of state intervention, there is a fairly wide range of theoretical views and corresponding practical approaches - from complete state monopoly in managing the national economy to extreme economic liberalism, when it is argued that An economy can be effective only in conditions of unrestricted private entrepreneurship. Between these extreme options there are a number of intermediate ones, for example, the Chinese version of a combination of market and state regulators, the so-called socially oriented market economy of Germany and Austria, the Swedish model of a mixed economy, etc.
A type of economy in which there was an extremely high degree of state monopoly, a centrally controlled economy was built in our country. It was based on comprehensive directive planning, i.e. centralized decision of questions about how much and what to produce, what resources should be used, how much labor and capital should be spent, what should be the wage, etc. The task of drawing up a balanced plan, coordinated in all respects, is practically impossible to solve due to its colossal size and static nature.
But even in the unlikely event of a balanced plan, a system where all the actions of economic entities are scheduled five years in advance turns out to be inactive and poorly adaptable to changes. One of the reasons is that private initiative was excluded from the economic sphere. All economic agents acted on the basis of planned targets, orders and instructions.
In addition, any viable system presupposes the presence of direct and feedback. Such connections underlie the market mechanism of self-regulation. Equilibrium between supply and demand is established in the presence of direct (from production to market) and reverse (from market to production) connections operating through a viable, flexible price system.
In a planned economy, there were direct connections, albeit deformed, but the reverse ones were practically inactive. The lack of feedback with fixed and distorted prices made the system insensitive to the dynamics of consumer demand. One of the consequences of this is overproduction in some industries and shortages in others. There was a shortage hallmark planned economy.
In any economic system, including a market economy, the state acts, in a certain sense, as an economic agent with the right and ability to coerce, for example, in the field of tax policy and state legislation. Coercion, if used extensively by the state, negates all the advantages of free enterprise based on competition and market pricing.
Attitudes towards government intervention in the market economy were different at different stages of its formation and development. During the formation of market relations in the XVII-XVIII centuries. the prevailing economic doctrine - mercantilism - was based on the recognition of the absolute need for state regulation for the development of trade and industry in the country.
With the development of market relations, the increasingly powerful class of entrepreneurs began to view government intervention and the associated restrictions as an obstacle to their activities. It is not surprising that those who came at the end of the 18th century. In place of mercantilism, the ideas of economic liberalism, which negatively assessed government intervention, immediately found a huge number of ardent fans.
Regardless of the prevailing economic doctrines, no one has ever relieved national governments of responsibility for economic situation countries. Everyone agrees that the invisible hand of the market must be complemented by the visible hand of the state. An important stage in the theoretical understanding of the role of the state in a market economy was associated with the name of the outstanding English economist J.M. Keynes. The ideas put forward during the “Keynesian revolution” revolutionized the classical views on the market economy. They proved the impossibility of self-healing of an economic recession, the need for public policy as a means capable of establishing aggregate demand and aggregate supply, and bringing the economy out of a crisis state.
The classics proceeded from the thesis about the need for the state to perform traditional functions, understanding that there are areas that are beyond the reach of the market competitive mechanism. This primarily concerns so-called public goods, i.e. goods and services that are consumed collectively. It is obvious that the state should take care of their production and organize joint payment to citizens for these products.
Problems that the market competitive mechanism does not solve include externalities, or side effects. When the production of any product leads to environmental pollution, additional costs are usually required. At the same time, this may not affect the price of the product, which entailed such side effects. External or side effects can be regulated through direct government control.
Economic practice revealed in the 19th century. and confirmed in the 20th century that there are situations, the so-called market fiasco, when market coordination does not ensure the efficient use of resources.
It should be noted that he “came close” to the problems of justice and equality. Unlimited market distribution, fair from the point of view of market laws, leads to sharp differentiation of income and social insecurity. When market distribution does not suit the majority of the population, it ends in extremely serious social conflicts. The state must correct the distribution provided by the market. Another market problem—unemployment—requires government intervention. Conditions are necessary to reduce it or mitigate its consequences if it is still inevitable
1.2. Functions of the state and the main instruments of state regulation
Regardless of the prevailing economic doctrines, no one has ever relieved national governments of responsibility for the economic situation in the country. In other words, everyone essentially agrees on the understanding that the “invisible hand” of the market must be complemented by the “visible hand” of the state. The state is called upon to correct those “imperfections” that are inherent in the market mechanism. Accordingly, it takes responsibility for creating relatively equal conditions for mutual rivalry between business firms, for effective competition, and for limiting monopolized production. The state is also required to direct economic resources to meet the collective needs of people and create the production of public goods and services. The participation of the state in economic life is also dictated by the fact that the market does not ensure a socially fair distribution of income. The state should take care of the disabled, children, the elderly, and the poor. As a rule, the market is not aimed at developments in the field of fundamental sciences, because this is associated with a high degree of risk and uncertainty, with huge costs. And in this area, government intervention is required. Since the market does not guarantee the right to work, the state has to regulate the labor market and take measures to reduce unemployment. Foreign policy, regulation of the balance of payments, and exchange rates also fall on the shoulders of the state.
In general, the state implements the political and socio-economic principles of a given community of citizens. It actively participates in the formation of macroeconomic market processes.
The role of the state in a market economy is manifested through its functions, the most important of which are the following:
Creating a legal basis for adoption economic decisions. The state develops and adopts laws defining property rights, regulating business activities, aimed at producing high-quality products and medicines, etc.;
Economic stabilization. The government, using fiscal and monetary policies, strives to overcome crisis phenomena, a decline in production, reduce unemployment, and smooth out inflationary processes;
Socially oriented resource allocation. The state organizes the production of products and services that are not provided by the private sector. It creates conditions for the development of agriculture, communications, transport, urban improvement, etc., determines spending on defense, space, foreign policy, forms programs for the development of education and healthcare;
Providing 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, indexes fixed incomes in connection with rising prices, etc.
The state influences the market mechanism through:
1) your expenses,
2) taxation,
3) regulation,
4) public entrepreneurship.
Government spending is considered one of the important instruments of macroeconomic policy. They influence the distribution of both income and resources. Large items include expenditures on defense, education, and social security.
A significant element of expenses is transfer payments. This, as already mentioned, includes various types of benefits (unemployment, disability, child benefits, income support), old-age pensions, and war veterans.
Another important instrument of government policy is taxation. Taxes play a significant role in income redistribution.
State regulation contributes to the formation of economic ties and proportions, coordination of economic processes and linkage of private and public interests. State regulation is carried out in various forms- legislative, tax, credit, subvention. Legislative form means that special legislative acts, providing relatively equal opportunities for competition, expanding the boundaries of competition, preventing the development of monopolized production, and the establishment of exorbitantly high prices.
Antimonopoly (antitrust) legislation is aimed at countering the monopolization of the economy and stimulating competition. In particular, in the Russian Federation in March 1991, the Supreme Council of the RSFSR adopted the law “On competition and restriction of monopolistic activities in commodity markets" This law provides for measures aimed against the formation of large companies such as trusts and concerns, as well as against unfair competition. A social body was created - the State Committee of the RSFSR for Antimonopoly Policy and Support of New Economic Structures. This Committee is tasked with monitoring that the formation of associations, corporations, and concerns does not lead to monopolization in the market. He has the right to give permission for the registration of new large economic structures and for the re-registration of existing large organizations
At the international level, competition is regulated by special interstate agreements, documents of the UN Commission on Industry and Trade, the European Economic Community and other organizations.
Tax and credit forms of regulation provide for the use of taxes and credits to influence national production volume. By changing tax rates and benefits, the government influences the contraction or expansion of production and investment decisions. By varying lending conditions, the state influences the decrease or increase in production volume. By selling securities, it reduces bank reserves, which raises interest rates and reduces production accordingly. By purchasing securities, the state increases bank reserves, while interest rates fall and production expands. The subsidy form of regulation involves the provision of government subsidies or tax benefits individual industries, enterprises (mainly such industries as agriculture, mining, shipbuilding, transport). The share of subventions in the GNP of developed countries is 5-10%. By issuing subsidies and reducing tax rates, the government thereby changes the allocation of resources, and subsidized industries are able to recover costs that they would otherwise not be able to cover at market prices.
Some Western economists believe that subventions disrupt the market mechanism, prevent the adequate distribution of economic resources, and slow down the market’s response to changes in demands and income on the demand side and to changes in costs and the quantity of production on the supply side.
Public entrepreneurship tends to be carried out in areas in which management is contrary to the nature of private firms or in which enormous investment and risk are required. State-owned enterprises occupy significant positions in such industries as energy, ferrous metallurgy, transport, and communications. The share of public entrepreneurship varies in different countries, but in these industries it is quite significant, as evidenced by the data.
2. State regulation of a market economy: necessity and opportunities
2.1 Main stages of interaction between the market economy and the state
To better understand the need for government regulation, let’s take a short excursion into the past - into the history of interaction between the state and the market economy. This is all the more interesting because the emergence of the state coincides in time with the emergence and development of commodity-money relations.
History shows that the interaction between the state and the market economy has gone through a number of stages.
At the first and rather long stages by historical standards, the state weakly intervened in market relations and acted as a political, rather than an economic institution. For its existence, it imposed taxes or tribute on certain subjects. Tariffs were usually imposed on foreign traders. In a word, the state, being a superstructural institution, was not yet part of the economic base.
Only at the stage of the formation of capitalism as a social system based on market relations, the state begins to actively intervene in the economy, acting as the most important factor in the initial accumulation of capital. Thus, it played a crucial role in the formation and strengthening of a new method of production. Let us note the main manifestations of this role.
1. The state waged wars in order to obtain indemnities and create the most favorable external conditions for the economic activity of the national bourgeoisie.
2. In accordance with the recommendations of representatives of mercantilism, the state established duties that protected the national market from the dominance of foreign goods, and fought for the abolition of such duties in countries to which national producers sent goods.
3. In order to accelerate the accumulation of capital, legislation was used, such as the laws “On Vagrancy”, “On the Working Day”, “On Wages”, adopted in England in the 18th century.
4. The state gave private companies the right to monopolize the sale of certain highly profitable goods: vodka, tobacco, tea, coffee, salt, etc.
5. Profitable government, primarily military, orders were placed at private enterprises.
6. With the help of the army and police, the state ensured internal order and protection of property rights in accordance with the principle “private property is sacred and inviolable.”
At the stage of free competition capitalism, when the economy becomes dependent on the regulatory role of the market, state intervention in it noticeably weakens. The state pursues a laissez-faire policy, that is, a policy of non-interference in the economy. Its activities boil down to maintaining external and internal conditions for the smooth functioning of the market mechanism.
The state is engaged in protecting national borders (here, figuratively speaking, it plays the role of a “night watchman”), maintaining internal order through the use of the judicial and repressive apparatus, collecting taxes for the maintenance of the state apparatus, issuing paper money and certain types of securities. According to the postulates of modern liberalism, the role of the state should be limited to such activities in our days.
At the stage of monopoly capitalism, there is a noticeable increase in state intervention in the economy.
First of all, such intervention was due to the policy of colonial conquest and preparation for wars for the redistribution of the world. In this regard, the state was engaged in placing military orders, the share of which in total demand grew noticeably, provided, through military-political and diplomatic methods, favorable conditions for the export of capital by national monopolies, and regulated the working and living conditions of workers.
The Great Crisis of 1929 - 1933, which occurred simultaneously with the accelerated development of the planned economy of the USSR, marked the beginning of the modern stage of interaction between the state and the market economy. There was an increase in government intervention in the economy, and anti-crisis policies began to be pursued. In the 1930s in the USA, F. Roosevelt’s “new course,” which included the centralization of the banking system, a ban on the export of gold from the country, state control over prices, and state lending to agriculture, helped bring the country out of the crisis. Thus, in the USA (and in parallel in Sweden) a system of state regulation of the economy began to take shape. After World War II, this system emerged in other market economies. On the basis of this system, a “social market economy” began to take shape in European countries, in which the state becomes a necessary and active subject of not only economic but also social life.
1. The presence in each country of public and mixed goods, which cannot always be brought to the population through the market in in full, especially those characterized by non-rivalry and non-excludability. These are personal and national security, transport services, education, healthcare, culture, etc. Such benefits should be provided by state bodies of internal law and order, the country’s army, a network of public roads, the system of public education, health care, culture, environmental authorities, etc.
2. Strengthening the social nature of the production of commodity goods. As a result, the economy becomes very vulnerable to cyclical economic development, especially during periods of crisis. There is a need for centralized public regulation of the economy. Moreover, the state is the only bearer of the conscious principle at the macroeconomic level. Other subjects - the population, firms, banks - are such only at the micro level. Their behavior as subjects of macroeconomics often diverges from public interests.
For example, we know that during a crisis, people tend to save more rather than spend, preparing for even worse times. This reduces aggregate demand and further aggravates the economic situation in the country. Firms behave in a similar way, reducing investment spending during a crisis. Banks also contribute to this behavior by increasing interest rates when the economy enters a crisis phase. It can be seen that all these subjects behave rationally from the point of view of microeconomics, but not from the point of view of macroeconomics. The only entity capable of behaving rationally at the macro level is the state.
3. The emergence of negative external market effects, called externalities. External effects (externalities) are characterized by the occurrence as a result of market relations between some persons of damage or additional costs for other persons who are not subjects of these relations.
The emergence of external effects is due to the fact that the economy exists in external environment- social and natural, through which these effects are manifested. Accordingly, social and environmental externalities arise.
Social externalities include such phenomena as poverty, crime, unemployment, covering that part of the population that finds itself outside the framework of market relations: the sick, the elderly, those with many children, the professionally unfit. The state is forced to deal with all of them, providing them with financial assistance. This ensures the social instability in society necessary for economic development.
Environmental externalities are due to the fact that the market mechanism forces enterprises to reduce production costs, including environmental costs. As a result, the production of commercial products is accompanied by pollution of the natural environment and the occurrence of corresponding environmental damage, which is imposed on the entire society. Here, too, there is a need for state environmental policy, forcing enterprises to comply with certain standards for emissions of pollutants into the natural environment.
4. An important factor in state regulation of the economy is scientific and technological progress (STP). The implementation of many achievements of scientific and technical progress requires huge capital, which only the state is able to mobilize, especially since the return on the implementation of these achievements does not always occur quickly. STP requires an increasingly qualified workforce, which again only the state can prepare on a large scale by developing a system of general and vocational education. NTP also places increased demands on people's health, which the state is forced to take on.
5. The state needs to intervene in the economy due to the tendency to monopolize its most important areas, which violates the perfection of the market.
The market is becoming increasingly imperfect and the state, through antimonopoly policy, seeks to prevent this trend.
6. Finally, government regulation is also developing under the influence of fierce international competition. Even large companies It is not always easy to survive in this competition without government support.
In general, government regulation turns out to be necessary for more sustainable economic, social, environmental and political development of society. It is ensured by maintaining the necessary macroeconomic proportions (primarily the relationship between aggregate demand and aggregate supply), ensuring social stability in society, maintaining a healthy environmental situation and, finally, maintaining a balance of political interests in society and ensuring trust in power on the part of various parties and social movements.
2.3 Possibilities of state regulation of a market economy
By the middle of the twentieth century. the need for state regulation of the market economy was provided with appropriate opportunities.
Such opportunities, first of all, include the expansion and strengthening of the public sector in the economy. This sector forms state property and funds available to the state.
The public sector itself arose along with the emergence of the state. The state has always had lands, buildings, structures, equipment (primarily military), etc. There has always been a budget that was formed and used by the state and influenced the economy. However, the size of this sector was insignificant for a long time and it did not have a significant impact on the economy. Thus, before the First World War, the state’s share in the national income of most countries with market economies was 3–10%.
There were no radical changes after the war, except for the USSR, where the economy became planned. The situation changed radically after the Second World War. Many industrial and transport enterprises, communications, banks, scientific and educational institutions, health care institutions, part of the housing stock, facilities became objects of state ownership. utilities, lands, forest lands. True, if we take the state’s share in the total means of production, then it varies in different countries: in the USA this share (without Pentagon ownership) is approximately 2%, in England -8 - 10%, in Germany - over 20%, in Japan and France - about 30%. The high share of state ownership was one of the grounds for characterizing the economies of many Western countries as mixed.
The expansion of state ownership was facilitated by the Second World War, which led to the emergence of many large military factories. In some countries, after the war, nationalization occurred, that is, the transfer of a number of private enterprises to state ownership.
Scientific and technological revolution played a significant role in the expansion of state ownership, leading to the emergence of new and rather capital-intensive industries with a low rate of capital turnover. In addition, these productions required significant funds for R&D, which did not promise a quick return in the form of profit.
We are talking about nuclear energy, aircraft manufacturing, and rocketry, the development of which was ensured by the state.
Since the scientific and technological revolution required a new workforce, the state had to take upon itself the development of education, healthcare, and social services. The intensification of international competition led to the bankruptcy of entire industries of national importance in some countries: the coal and gas industries, metallurgy, and railway transport. The state was forced to take care of their preservation and development.
In addition, the state had to nationalize some enterprises that had a natural monopoly: railway transport, energy, communications.
Played a major role in the formation of the public sector the state budget. Thanks to him, the public sector received cash for your development. At the expense of the state budget, the nationalization of private enterprises was carried out through buyouts, and new enterprises were created, including infrastructure-type enterprises designed to serve the private sector.
The state budget became the basis for government purchases of goods from private firms. For example, in the United States, about 20% of GNP comes from government procurement.
Significant opportunities for the state to influence the economy are associated with the redistribution of national income. In a number of countries, over 50% of national income passes through the state budget. The impact on the economy is carried out both in the process of forming the state budget through tax policy, and in the process of its use through budget policy. If in 1870 government spending in 14 OECD countries amounted to only 11% of GDP, in 1913 - 13%, then in 1960 - 28%, in 1980 - 42%, in 2000 - 45%.
An integral part of the public sector are state banks, who in a number of countries have taken over the leadership of the banking system. It became possible for the state to have a targeted influence on the money supply and on the lending activity of private banks.
In general, the presence of the public sector in the economy allows the state to use economic methods of influencing the private sector as the basis of a market economy.
Significant opportunities for government regulation are associated with the formation of a powerful administrative and legal system in countries with developed market economies. Not only theory, but also practice has shown that society does not need a market in general, but an organized market operating within the framework of certain laws and rules. In this regard, economic law has developed, and a system of legislative regulation of the national economy has emerged.
The administrative-legal system made it possible to exercise control over monopoly markets, market externalities, and ensure the protection of national interests in international markets.
The capabilities of the state have also expanded due to the strengthening of its national character as a superstructural institution. If previously the state acted as an instrument of political power of the ruling class, then in modern conditions it is intended to be an instrument for balancing class and social interests, ensuring national harmony and social world. Understanding the need for such a role for the state makes the ruling classes more tolerant of its interference in the private sector.
The strengthening of the national character of the modern state was also facilitated by the formation of the so-called middle class - a fairly significant part of the population with average incomes, which has become a kind of balance between the poor and the rich.
It is also impossible not to note the role of science, primarily economics, in the theoretical support of state regulation of the economy. Economic and mathematical methods have acquired particular importance, allowing one to model economic processes and thereby foresee the consequences of political and economic decisions made.
2.4 Contradictions of state regulation of a market economy
State regulation of the market economy after World War II gave good results. In the 50s - 60s. They even began to say that Western countries had entered a “golden age” of their development, a “century of prosperity.” There were the following reasons for such statements:
The noted decades were a period of almost crisis-free development, especially for the countries of Western Europe and Japan;
There were relatively high rates of economic growth;
Employment was maintained at a consistently high level;
The income and standard of living of the population increased relatively quickly and steadily.
But by the end of the 60s. Serious problems began to emerge, the roots of which began to be seen in government regulation of the economy. Scientists began to talk not only about the “defects” and “failures” of the market, but also about the “failures” and “defects” of the state.
Thus, the causes of inflation were discovered in the application in the post-war period Keynesian model regulation with its emphasis on fiscal policy measures. In fact, in order to stimulate economic growth, the state often spent more money than it received into its budget in the form of taxes. The state budget deficit in many countries has become chronic, and the main means of combating it has become the issue of money and government securities (government borrowing). All this could not but contribute to the growth of inflation.
Inflation was also associated with full employment policies. This policy assumed the involvement of all factors of production in production, including those that were insufficiently efficient, but requiring remuneration at the level of efficient ones. Accordingly, the owners of efficient factors of production, primarily labor, demanded a higher price for them than for ineffective factors. The result was an “inflationary spiral.” By the beginning of the 70s. inflation began to move from creeping to galloping.
The aggravation of the inflation problem largely contributed to the fact that in the 70s. In countries with market economies, changes began to occur in the practice of regulating the economy. Supply-side policy models began to be used to replace the Keynesian model. However, not without the impact of this policy, many countries faced such new problems as slapflation and stagflation.
Slapflation is characterized by a combination of economic contraction, rising unemployment and high inflation, which clearly contradicted the Philipps curve. Periods 1973 - 1975 and 1980 - 1982 were characterized by a significant decline in production in almost all countries with market economies, while inflationary processes persisted.
Stagflation is characterized by a combination of economic stagnation, high unemployment and inflation. The one-sided upward movement of prices, despite unfavorable economic conditions and even a decline in production, is what is called the “ratchet effect” - a phenomenon characteristic of stagflation.
In general, government regulation has encountered a number of contradictions.
1. Contradiction between the goals of government regulation. For example, it is necessary to simultaneously contain inflationary price increases and ensure full employment, which, as we have seen, are not always compatible. The contradiction between social justice and economic efficiency, which manifests itself in the fact that the state’s desire to achieve greater social justice through a more equal distribution of national income leads to a decrease in the efficiency of production of the same national income. As a result, the “national pie” is not growing as quickly, limiting the possibilities for increasing the incomes of the poorest part of the population.
2. Contradiction between models of government regulation. Basically, this is a contradiction between models that assume active government intervention in the economy and models that assume very moderate intervention. As a result, in state policy in the 70s - 90s. There was a kind of pendulum between dirigisme and liberalism, which was reflected in the successive replacement of representatives of dirigisme and liberalism in state power.
3. Contradiction between instruments of government regulation.
For example, stimulating aggregate demand through fiscal policy may lead to higher interest rates and curb net exports.
The policy of “expensive money” also narrows export opportunities. Excess bank reserves formed under the influence of government policy do not always turn into loans, since banks limit them during a recession, taking care of their liquidity.
4. Contradictions caused by the presence of a time lag between identifying existing problems in the economy, making decisions and carrying out specific activities. The economy often reacts to these measures with a delay, and sometimes this reaction no longer corresponds to the economic situation that has changed since the decision was made.
All these contradictions appear as objectively inevitable, which raises the problem of choosing the optimal option for state regulation. Starts to play a big role in this choice economics. Its practical function is becoming increasingly stronger.
3. State intervention in the economy and the problem of limiting such intervention
3.1. Ways of government intervention in the economy
First of all, it is important to distinguish between two main forms: direct intervention through the expansion of state ownership of material resources, lawmaking and management manufacturing enterprises and indirect intervention through various economic policies.
Direct government intervention is the adoption of legislative acts designed to streamline and develop relations between elements of the market system. An example of state regulation of the economy through the publication of legislative acts is the regulation on cooperation in France.
Indirect interference. Depending on the purpose of the intervention, economic policy measures can be aimed at:
Stimulating investment;
Ensuring full employment;
Stimulating the export and import of goods, capital and labor;
Impact on the general price level in order to stabilize it;
Supporting sustainable economic growth;
Redistribution of income.
To carry out these various measures, the state resorts mainly to fiscal and monetary policies. Fiscal policy- This fiscal policy. It can be defined as a policy carried out by manipulating government revenues and expenditures. Monetary policy is a policy carried out through regulation money supply in circulation and improvement credit sector. Both of these areas of public policy are closely related to each other. However, this relationship differs significantly in market and centralized economies.
Countries with market economies are constantly looking for the optimal combination of government regulation and the functioning of a naturally occurring market mechanism.
In a market economy, taxes play such an important role that we can say with confidence: without a well-established, clearly operating tax system, an effective market economy is impossible.
What exactly is the role of taxes in a market economy, what functions do they perform? When answering these questions, they usually start with the fact that taxes play a decisive role in the formation of the revenue side of the state budget. This is certainly true. But the first place should be given to the function, without which it is impossible to do without in an economy based on commodity-money relations. This function of taxes is regulatory.
A market economy in developed countries is a regulated economy. Imagine an efficiently functioning market economy in modern world, not regulated by the state, is impossible. How it is regulated, in what ways, in what forms is another matter.
State regulation is carried out in two main directions:
Regulation of market, commodity-money relations. It consists mainly in defining the “rules of the game”, i.e. development of laws and regulations that define the relationship between persons operating in the market, primarily entrepreneurs, employers and hired workers. These include laws, regulations, instructions from government bodies regulating the relationship between commodity producers, sellers and buyers, the activities of banks, as well as labor exchanges. This direction of government regulation of the market is not directly related to taxes.
Regulating the development of the national economy, social production, when the main objective economic law operating in society is the law of value. Here we are talking mainly about financial and economic methods of influence of the state on the interests of people and entrepreneurs, with the aim of directing their activities in the right direction, beneficial to society.
In market conditions, methods of administrative subordination of entrepreneurs are reduced to a minimum, the very concept of “superior organizations” that have the right to manage the activities of enterprises with the help of orders, commands and orders is gradually disappearing.
By manipulating tax rates, benefits and fines, changing tax conditions, introducing some taxes and eliminating others, the state creates conditions for the accelerated development of certain industries and industries, and helps solve problems that are pressing for society. So, at the present time, perhaps, there is no task more important for us than the rise of agriculture and solving the food problem. In this regard, in the Russian Federation, collective farms, state farms and other agricultural production are exempt from income tax.
Another example. It is well known that an effectively functioning market economy cannot be imagined without the development of small businesses. Without it, it is difficult to create an economic environment favorable for the functioning of commodity-money relations. The state should promote the development of small businesses and support them by creating special funds for financing small businesses, preferential lending, and preferential taxation.
Another function of taxes is stimulating. With the help of taxes and benefits, the state stimulates the technical process, an increase in the number of jobs, capital investments to expand production, etc.
The next function of taxes is distribution, or redistribution. Through taxes, funds are concentrated in the state budget, which are then directed to solving national economic problems, both industrial and social, financing large intersectoral, complex targeted programs– scientific, technical, economic, etc.
With the help of taxes, the state redistributes part of the profits of enterprises and entrepreneurs, the income of citizens, directing them to the development of production and social infrastructure, to investments and capital investments. The redistributive function of the tax system has a pronounced social character. Properly built tax system allows you to give a market economy a social orientation, as is done in Germany, Sweden and many other countries.
3.2. Limiting government intervention in the country's economy
It is obvious that a modern market system is unthinkable without government intervention. However, there is a line beyond which market processes become deformed and production efficiency decreases. Then, sooner or later, the question arises of denationalizing the economy, ridding it of excessive state activity. There are important limitations to regulation. For example, any government actions that destroy the market mechanism (total directive planning, comprehensive administrative control over prices, etc.) are unacceptable. This does not mean that the state abdicates responsibility for uncontrolled price increases and should abandon planning. The market system does not exclude planning at the level of enterprises, regions and even the national economy; however, in the latter case it is usually “soft”, limited in terms of time, scale and other parameters, and acting in the form of national target programs. It should also be noted that the market is in many ways a self-adjusting system, and therefore it should only be influenced indirectly, economic methods. However, in a number of cases, the use of administrative methods is not only acceptable, but also necessary. You cannot rely only on economic or only administrative measures. On the one hand, any economic regulator carries elements of administration. For example, money turnover will feel the influence of such a well-known economic method as the central bank lending rate no earlier than an administrative decision is made. On the other hand, there is something economic in every administrative regulator in the sense that it indirectly affects the behavior of participants in the economic process. By resorting to, say, direct price control, the state creates a special economic regime for producers, forcing them to reconsider production programs, look for new sources of investment financing, etc.
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.
We must not forget that economic regulators themselves should be used with extreme caution, without weakening or replacing market incentives. If the state ignores this requirement and launches regulators without thinking about how their action will affect the market mechanism, the latter begins to fail. After all, monetary or tax policy in terms of its impact on the economy is comparable to central planning.
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. For example, the state seeks to curb inflation by limiting the growth of the money supply. From the point of view of fighting inflation, this measure is effective, but it leads to an increase in the cost of central and bank credit. And if interest rates rise, it becomes increasingly difficult to finance investments, and economic development begins to slow down. This is exactly how the situation is developing in Russia.
Government intervention in the economy requires quite large expenditures. They include both direct costs (preparation of legislative acts and monitoring their implementation) and indirect costs (on the part of firms that must comply with government instructions and reporting). In addition, it is believed that government regulations reduce the incentive for innovation and the entry of new competitors into the industry, since this requires permission from the relevant commission.
According to American experts, government influence on economic life leads to a decline in growth rates of approximately 0.4% per year (Lipsey R., Steiner P., Purvis D. Economics, N.Y. 1987, P.422).
Due to certain imperfections, government intervention sometimes entails losses. In this regard, in recent years the issue of economic deregulation and privatization has become more acute. Deregulation involves the removal of legislation that hinders the entry of potential competitors into the market and sets prices for certain goods and services. For example, in the United States in the 1980s, deregulation affected trucks, rail and air transport. As a result, prices have dropped and passenger service has improved. For the American public, deregulation of freight, air and rail transport brought benefits estimated at $39-63 billion, $15 billion, and $9-15 billion, respectively. in year
Privatization - the sale of state-owned enterprises to individuals or organizations - is aimed at increasing economic rationality. It is caused by the fact that state-owned enterprises turn out to be unprofitable and ineffective. Western economists emphasize that the public sector does not provide such a powerful incentive to reduce costs and generate powerful profits as private enterprise does. For an entrepreneur - one of two things: profit or loss. If a private enterprise suffers losses for a long time, it closes. A state-owned enterprise is provided with assistance, so it may not strive to increase its profitability.
This once again proves that government intervention is only needed where it is vitally necessary. In all other cases, the market will more effectively solve the assigned economic problems.
Government regulation in agriculture. In modern Western economies, agriculture is one of the most important areas of active intervention. In this area of production, the main principle of the free market, namely the game of supply and demand, turns out to be practically inapplicable. True, government intervention is far from a panacea. For example, in Western Europe, governments have traditionally paid great attention to the problems of the agricultural market, but neither producers nor consumers are satisfied with the state of affairs in the agricultural sector.
The source of the problems is that in developed countries, thanks to high performance labor production of agricultural products significantly exceeds the needs of the population.
The goals of state regulation in the field of agriculture include:
a) increasing productivity through the introduction of technical progress and rationalization of production, the most efficient use of all production factors, especially labor;
b) ensuring employment in the agricultural sector and an appropriate standard of living for the rural population;
c) stabilization of agricultural markets;
d) guaranteed supply of the domestic market;
e) concern for the supply of agricultural products to consumers at “reasonable prices”.
The state sets and annually reviews minimum prices for the most important agricultural products. Thus, producers are protected from a sharp drop in prices. At the same time, the domestic market is protected from cheap imports and excessive price fluctuations through a system of additional import duties. Therefore, in EU countries, food prices are noticeably higher than world market prices. Costs in connection with the implementation of agricultural policy are borne by the state budget.
The functioning of this mechanism can be illustrated using the example of the grain market. The starting point is the estimated price recommended by the state. It is slightly higher than the market price, which not only guarantees the income of rural owners, but also creates incentives to expand production. As a result, supply exceeds demand. When market price decreases to a certain level, the grain offered by rural owners is bought by the state at the so-called “intervention price” in unlimited quantities.
Thus, although each producer must bear the marketing risk himself, in reality this rule does not apply to producers of many agricultural products.
There are also mechanisms to protect against cheap imports and encourage exports. This means that upon import, an import duty is established that equates the price of the product to the domestic price. When exporting, the state pays exporters the difference between the domestic price and the world market price.
It should be noted that this policy provoked many problems. On the one hand, huge food reserves have been accumulated, on the other hand, there is discontent among the peasants who believe that their subsistence level is not provided. In this situation, large agro-industrial enterprises receive decent incomes, while small producers struggle to make ends meet.
Thus, agriculture remains a weak point of government regulation. However, it seems that the situation in agriculture will remain unchanged.
3.3. Features of state regulation of the economy in Russia
To explain the reasons current situation affairs regarding the level of economic regulation in Russia, consider the events taking place in the country quite recently, 25-30 years ago, when:
In Russia, a command-administrative system of government was practiced, imperative planning and prevailed state uniform property;
There was evidence of low efficiency of the public sector in the economy, encouragement of so-called planned unprofitable enterprises;
The inability of the state to ensure the necessary rates of economic growth was revealed;
This order of things gave rise to dependency and inertia of both the consumer and the producer;
Excessive government intervention led to the undermining of the market and its natural laws.
Protesting against these postulates, it was proposed to carry out radical reforms.
First of all, they abandoned the idea - the practice of the country as a single factory, one national trust, and the primacy of the state in the economy. The ideas of liberalism, monetarism, privatization, and freedom of economic agents in production and exchange have become relevant.
During the period of reforms carried out after 1991, there was a transformation of the previously dominant structure, based on public ownership, into other structures with a clear increase in the share of private entrepreneurship.
The paternalistic model of relationships that previously existed between the state and the enterprise was completely destroyed by 1996. Businesses lost confidence in government authorities and often refused to pay taxes. In 1993, there was still a consensus of interests between the state and the enterprise, that is, the state gave privileged loans, and in exchange for this the enterprise paid taxes.
The ugly nature of the reforms undertaken led to rampant crime on an unprecedented scale. Mass criminalization of all spheres of public life accompanied the process of ill-conceived privatization, essentially the seizure of public property by a few. The appearance of thousands joint stock companies and the mandatory legal requirement to buy back part of the shares using exclusively vouchers gave a powerful impetus to the development of the stock market with all its negative consequences. Most of the frauds were related to circulation, theft, forgery of vouchers, falsification of privatization documents, understatement of the residual value of funds of privatized enterprises, and so on.
The ineffective activity of the state at that time can be judged by the indicators: as of 2000, relative to 1990, Russia's GDP was less than 59%, industrial production - 54.5, agricultural production - 61.2, investment in fixed capital - 27.5% .
It is clear that the government should have, first of all, taken care of reforming and democratizing state property itself, and only then move on to privatization.
Moving on to modern aspects of state regulation of the economy, we can say that a modern market economy, as a rule, is built on a contractual basis. Under such conditions, both the object and the subject of national economic influence change fundamentally. The subjects of influence are the federal government, administrations of the constituent entities of the Federation, industry and inter-industry associations and enterprises.
Many economists note that in the Russian economy there is a need for state influence on:
Sphere of production;
Scope of circulation;
Sphere of management;
Social infrastructure;
To preserve and enhance Russia's scientific and technological potential, a set of carefully designed measures is required. First of all, the development and implementation of state scientific and technological policy. This is one of the most important tasks facing government bodies at the present stage. The main criteria should not be the formal pace of reforms, but minimizing losses of national wealth and achieving a real improvement in the lives of the population.
There is a position that modern Russia will not be able to “extricate itself” from the rather difficult economic situation that it is now facing only by attracting financial resources and ensuring their circulation in the country, but by creating a proper and appropriate production base. The country's economy cannot stay afloat solely by exporting natural energy resources. Thus, one of the main functions of the state at the moment is the creation of capacities in the processing, food, technological, and engineering industries.
We can give an example of the successful action of the government of our country in relation to the automotive industry.
Using the example of protectionist measures, we can show the role of government regulation in the Russian Federation. With the formation of market relations, foreign products began to penetrate into the Russian market. car companies to form your own sales network. At the same time, things were going very badly for domestic automakers: production costs were growing catastrophically, quality was rapidly falling, prices were becoming prohibitive - there was an overstocking of products, and demand was falling. The prices of domestic cars approached foreign ones, while the quality of foreign cars was much higher. In the end, under pressure from domestic automakers, the government was forced to introduce state duties on imported motor vehicles of more than 100%. On the one hand, in order to prevent enterprises and related enterprises from going completely bankrupt, this is correct; on the other hand, the state actually put them in a state of monopoly, headed by AVTOVAZ, since, in fact, there was no serious competition between domestic automakers, because they occupied different production niches.
Well, from my own experience I know that they did not buy fewer foreign cars, but we did not lose such an important industry as the automotive industry.
As for price fixing, for three recent years The government of the Russian Federation has repeatedly fixed prices for the products of certain imaginary monopolies. Such measures cannot be called a wise response to competition problems in the formation of market relations. First, the government did not have clear criteria and reliable methods for identifying monopoly enterprises, and as a result, hundreds and even thousands of enterprises fell into this category. Moreover, it underestimated the ability of international competition or the freedom to create new companies to limit the power of true monopolies. Secondly, price control strikes at quite competitive industries and does not lead to the establishment of competitive prices, but to commodity shortage. And third, government price fixing may encourage businesses to develop an unspoken overall monopoly strategy. Thus, by setting high official prices for a particular product, the government may inadvertently contribute to the emergence of a monopoly where there used to be one. State prices actually become not a ceiling, but a price threshold for enterprises in the industry, contrary to the good intentions of the government.
Of course, when forming market relations in Russia, it is necessary to pursue a policy of protecting domestic producers from the import of foreign goods, but not to the same extent as stated above and as our government has, in principle, done.
It is now clear that the objects of close attention of government agencies should be:
The problem of choosing a strategy for national development, the main component of which is strengthening the unity of the state;
Problems of rational development of rich areas natural resources; economic and social development of the North, Eastern Siberia; energy supply to the eastern part of the country, etc.;
Major regional socio-economic and environmental problems, such as economic recovery and increased employment levels in depressed areas, resettlement of forced migrants and refugees.
Conclusion
In the course of this work, we examined some of the tasks we posed at the beginning of our research.
First, we studied the role of the state in the country's economy and the functions of the state. No one denies the need for the state to perform certain functions in the economic sphere. However, on the questions in what proportions should the state and market regulation, what are the boundaries and directions of state intervention, there is a fairly wide range of theoretical views and corresponding practical approaches - from complete state monopoly in managing the national economy to extreme economic liberalism, when it is argued that the economy can only be effective in conditions of unrestricted private entrepreneurship.
Secondly, we looked at government regulation of a market economy.
The market system is, first of all, flexibility and dynamism in decision-making, both on the part of consumers and on the part of producers. State policy simply does not have the right to lag behind changes in the market system, otherwise it will turn from an effective stabilizer and regulator into a bureaucratic superstructure that slows down the development of the economy. Very often the state is the root cause of changes in the economic behavior of entrepreneurs. The decisions made (or not made) at the micro level depend on the decisions made by the government. Government policies achieve goals only when they encourage rather than prescribe. When creating favorable conditions for entrepreneurs, their private interest will coincide with the interest of the state, that is, society. Consequently, the state should simply make the sector of the economy that is its highest priority more accessible to entrepreneurs.
It should be noted that the state should not interfere in those areas of the economy where its intervention is not necessary. This is not only unnecessary, but also harmful to the economy.
Thirdly, the task that we set and completed was to study government intervention in the economy and the problem of limiting such intervention. The state intervenes in economic processes in various ways, both direct (issuing legal acts regulating certain relations) and indirect. It is obvious that a modern market system is unthinkable without government intervention. However, there is a line beyond which market processes become deformed and production efficiency decreases. Then, sooner or later, the question arises of denationalizing the economy, ridding it of excessive state activity. There are important limitations to regulation. For example, any government actions that destroy the market mechanism (total directive planning, comprehensive administrative control over prices, etc.) are unacceptable.
We also examined the features of state regulation of the economy in Russia. There is a position that modern Russia will not be able to “extricate itself” from the rather difficult economic situation that it now faces only by attracting financial resources and ensuring their circulation in the country, but by creating a proper and appropriate production base. The country's economy cannot stay afloat solely by exporting natural energy resources. Thus, one of the main functions of the state at the moment is the creation of capacities in the processing, food, technological, and engineering industries.
In general, it is difficult to overestimate the role of the state in the economy. It creates conditions for economic activity, protects entrepreneurs from the threat of monopolies, meets society’s needs for public goods, provides social protection for low-income groups of the population, and resolves issues of national defense.
Thus, we can conclude that the purpose of this work - to study the issue of state regulation of the economy - has been fulfilled.
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Problems of government intervention in the economy have been relevant throughout the history of the state. They acquired especially great importance in a market economy, when production began to be carried out on a large scale, and the market mechanism was assigned the role of a regulator of economic relations.
Large-scale production and the market are unthinkable without developed economic relations, which in modern conditions are already outgrowing national borders and becoming international. Besides, modern society differs significantly from the society of the period of the formation of a market economy: it is characterized not only by a larger and more complex economy, but also by the presence of a social sector that was practically absent before.
These and a number of other circumstances caused a radical change in views on the role and place of the state during the formation and development of a market economy and now. Moreover, at modern economists There is a significant discrepancy in views on the need and forms of government intervention in the economy. This chapter is devoted to elucidating the need and reasons for state intervention in the economy, the factors and methods of this intervention, as well as the forms of state policy in the field of economics.
The need for government intervention in the market economy
Large-scale production, which began to take shape in the modern world since the advent of machines, is unthinkable without the presence of developed economic ties and specific economic relations. These kinds of connections and relationships are established and implemented differently. Their content depends both on the degree of socio-economic development of a given society and on the economic model it has chosen - administrative-command or market. If for the first model the main means of regulating connections and relationships is the state directive plan, then for the second the function of regulation is performed by the market mechanism. Life has shown that each of these models has both positive and negative properties. However, in modern conditions, the most effective, and therefore the most widespread, is the market model (its modifications) with its inherent market mechanism that ensures the regulation of economic relations.
Like any socio-economic model, the market model is not absolutely ideal: it has significant defects. The desire to get rid of them throughout the history of the market leads to the search for means and methods to improve its operation. Therefore, in practice, the use of a market model is always associated not only with the action of the market mechanism, but also with other additional means and techniques that can more effectively regulate economic relations. To determine the forms and methods of regulating the economy, it is necessary to establish the bottlenecks in the operation of the market mechanism, which require additional measures. Only by identifying such places can one look for ways to eliminate or minimize them.
The most significant defects of the market model can be grouped into two groups. The first includes all those associated with the limited scope of market relations. Thus, a number of important sectors of activity for society fall completely or partially out of the zone of action of the market in general and the market mechanism in particular. These are, for example, national defense, public order, firefighting services, sanitary and epidemiological services, environmental protection and reproduction. The second group includes market defects associated with the fact that the latter is not only unable to ensure social justice, but, on the contrary, contributes to increased income differentiation and thereby the stratification of society into the poor and the rich.
In addition to the obvious limited capabilities of the market, which require additions to the operation of the market mechanism, there are a number of other circumstances that objectively determine the need for third-party intervention in the operation of the market, which requires a special body that can significantly supplement and improve the market mechanism and thereby increase its efficiency. The history of the existence of the market shows that only the state can be such a body. Only it can create a complete set of institutions designed to implement measures and means that improve the functioning of the market.
Among the variety of forms of government intervention in the market economy, a special place is occupied by the creation and regulation legal and institutional market environment. The legal field for the operation of unified market relations cannot arise and improve on its own. Only a special authoritative and powerful body is capable of creating, universally disseminating and monitoring the effectiveness of national rules of the game. economic sphere. Moreover, the more developed and strong the state is, the more perfect the quality and level of its legal framework in general, including the economic one, and the scale of the legal field becomes more and more universal.
The experience of industrialized countries shows that in modern conditions, to ensure normal legal regulation of economic relations, from three to six thousand state laws and regulations are required.
The state plays an important role in the creation and development of the components of the market mechanism - prices, market demand and supply. So, in transition period from the administrative command model to market state carries out price liberalization. This process is associated with the transformation of a monopoly market into a competitive one with all the ensuing consequences, both positive, when competition acts as the engine of progress, and negative, if competition increases the differentiation of society. Only the state has the ability to soften the severity of the process of price liberalization and reduce it to a minimum. negative consequences and help maximize the impact of positive effects.
By carrying out liberalization, the state creates favorable conditions for the emergence and development of small and medium-sized businesses, makes markets freer for new sellers and manufacturers to enter them.
In addition, in the interests of society, the state, even in a market economy, can regulate the price system. There are three possible options for government influence on the price level:
- 1) indirect, through manipulations with tax rates, excise taxes, customs and other fees, which will affect the reduction or increase in prices;
- 2) by freezing prices for a certain number of goods (usually for vital necessary goods), the production of which is temporarily limited;
- 3) setting the price by a strong-willed decision.
By influencing demand, the state is able to regulate the market, and through it, the entire economic process. So, during periods economic downturns the state, using certain tools and techniques, can significantly influence demand. An increase in demand serves as a signal for an increase in supply with all the ensuing consequences: revival of production, restoration of economic ties and proportions, i.e. creating preconditions for economic growth.
One of the central tasks of the state in market conditions is to assist in the formation of an economic, business and investment climate. For these purposes, the state develops and adopts a set of laws declaring the rights of economic entities to property, to occupation entrepreneurial activity, to a single economic space, preferences for investors, etc. Each document must contain a list of conditions and restrictions for a certain area of activity (including antitrust), as well as conditions and benefits for investors. The current stage of development is most characterized by a softening of the economic climate, which means a desire for greater economic freedom and globalization. In practice, this is expressed in the fact that the state consistently weakens barriers to entry into the market, for example, by reducing the number of licensing authorities, reducing the volume of documentation for opening companies, etc. In addition, the state helps create favorable conditions for maintaining a competitive environment within the country, as well as implementation of effective foreign economic activity.
An important role belongs to the state in creating a favorable investment climate in the country, since the volume and direction of investment in the economy are the main material factors of economic growth.
Creating conditions for the influx of investments and their most effective application requires a set of circumstances, most of which largely depend on the state. Circumstances of this kind are the current legislation in the country, economic stability; government guarantees to investors ensuring the safety of their investments; the current tax system in the country; customs and foreign economic policy. In addition, a serious condition for creating a favorable investment climate in a country (especially for foreign investors) is the authority of a given state in the world economic and political arena: the higher it is, the equal conditions the state is more attractive to investors.
An important place in the activities of the market is occupied by it infrastructure, consisting of auxiliary elements that ensure the normal functioning of the market mechanism.
Modern market infrastructure is a complex and branched organism, including financial, information, transport, functional (markets with their territories and structures), research and other systems. The activity and efficiency of the market largely depend on the set and quality of infrastructure.
Subjects of market infrastructure can be both private companies and state enterprises and organizations. The relationships that develop between market subjects and representatives of the market infrastructure are determined mainly by the action of the market mechanism. However, this does not mean that the organization (formation) and operation of the market infrastructure system are carried out exclusively automatically, without any third-party intervention.
For market infrastructure, it is objectively necessary for the state to participate in its formation, regulation and control of activities. By using financial system- through central bank and the state budget - the state performs the following functions:
- o organizes money circulation and regulates cash flows;
- o creates conditions or creates a most favored nation regime for the functioning information systems, transport communications;
- o provides areas for markets and market structures;
- o organizes training and retraining of qualified personnel and takes part in this process;
- o develops market forecasts and creates programs for the development of a market economy.
In addition, the state exercises control over the activities of all structural links of the market infrastructure and helps improve the efficiency of their work.
Thus, the main areas of government intervention are the formation of the legal and institutional market environment, the economic, business and investment climate, as well as the organization, support and control of the activities of market infrastructure.