In the previous section, it was shown that the acceleration or deceleration economic growth has an impact on employment and the standard of living of the population. The economic activity of people ultimately aims to create a material base for improving living conditions. However, the market mechanism cannot automatically solve all social problems, so the state carries out market correction through social policy. In the broad sense of the word social It is customary to name everything that is directly related to society, people, their lives.
15.1. Essence and main directions of social policy
Social politics - a system of measures taken by the state to address social problems related to meeting the needs of people.
However, this general definition needs to be specified and clarified. Any society consists of various social groups, each of which has its own interests, values and needs. social benefits - material and spiritual are in short supply, they are not enough to meet the needs of all. As a result, competition is created between groups for mastering the sources of social benefits, including for the right to establish rules for their distribution. The main lever for realizing the interests of social groups is power, which enables some social groups to impose their will on other groups through state institutions.
Social policy covers social sphere:
material conditions of non-productive human activity - housing, services, healthcare, education, trade, public catering, public transport, the material base of culture and sports, etc.;
intangible benefits - a set of various types of spiritual activity, including self-organization and self-government.
The goal of social policy is to achieve social justice and reduction of social inequality. The categories "social justice" and "social equality" are not identical. It cannot be assumed that the presence of social inequality means social injustice, that the achievement of social justice will eliminate social inequality.
Social inequality there is an unequal position in the social sphere, it is expressed in the fact that some groups of the population consume more than others, play a large role in managing, for example, production, have great opportunities for leisure, etc. Is it fair or not? Such a question in the abstract form does not make sense. Equity assessment depends on the norms and values of a particular society, on the state of mass and group consciousness in a particular historical time. What is considered fair in a given society may have been perceived as unfair in the past, and
turnover. This means that social policy also has a historical character and changes over time.
In principle, social justice in a society with a market economy is associated with the distribution of benefits in accordance with achieved level labor and production efficiency. Recently, in a number of developed countries, social justice involves ensuring a decent standard of living for every citizen, equalizing the standard of living of people.
The emergence of a trend towards social equalization in developed countries It is expressed in the formation of the so-called middle class, which includes that part of the population that has a stable and relatively high level of income. For example, in the United States, the middle class makes up approximately 70% of the total population.
The market economy presupposes the existence and preservation of social inequality, since in the course of competition some business entities achieve high level efficiency and income, while others, acting less successfully, suffer losses or even go bankrupt. Ultimately, this inequality is determined by the differences between market participants in terms of their abilities, knowledge, and skills.
However, at a higher phase of its development, the market provides conditions for social equalization, but only within certain limits. There are two explanations for this:
the market by its nature is a form of compromise between its participants. Its results can be realized only under the condition of mutual, mutual satisfaction of needs;
at a higher stage of development, with market saturation and intense competition, sales participants are interested in high consumer incomes.
In some cases, the contradictions between social groups can be so great that the function of the social equalization market can be erased, then a strong state social policy is needed.
Under normal conditions, the state only carries out market correction ka. It consists in the development and implementation of certain principles.
1. Determination of the degree of freedom. State policy should proceed from the provision of freedom of activity, self-realization of group interests, but within the framework of adopted laws. The freedom and rights of some citizens are limited by the freedom and rights of other citizens.
2 Solving social problems by the state, by harmonizing the interests of various social groups, finding a compromise between them.
3. Joint responsibility of social groups in relation to those citizens of the country who are weak or limited in their labor opportunities.
Main goals social policy:
the formation of such levels of well-being among various groups of the population, the differentiation of which would not contradict the principles of social justice;
creation in society of such mechanisms for the formation of well-being that would stimulate the population to work efficiently and develop the economy;
Satisfaction of reasonable material needs of all members of society in the amount that maximally contributes to the development of the human personality.
Social Policy Performance Indicators - level and quality of life of the population. The quality of life characterizes general terms and Conditions in which people live, the whole range of its properties, reflects the degree of satisfaction of people's needs, comfort, convenience of living conditions, their adaptability to modern requirements, painlessness and duration
concept "standard of living" to a greater extent characterizes the quantitative measure of people's well-being, the level of consumption of material goods. To assess the standard of living, indicators such as basic consumption products per capita or for one family which are then compared with consumption standards. Indicators are important for assessing the standard of living consumption patterns (for food, durables, services, etc.).
Among the widely accepted indicators of the standard of living are cash income of the population per person or family.
Social politics includes two main parts: income policy and employment policy.
PLAN.
Introduction1. The history of the evolution of ideas about the role of the state in the economy
- Mercantelists
- classical theory
- Keynesian theory
- neoclassical theory
- antitrust regulation
- government spending
- taxation
- state regulation
- state enterprise
- deregulation and privatization
- state regulation in agriculture
List of used literature
Introduction.
Problem government intervention in the economy is, in my opinion, is the main one for any state, regardless of whether it is a market economy or a distribution economy. In a distributive economy, everything is simpler: the state assumes all rights and obligations for the production and distribution of goods and services. That is, there is no need to talk about regulation: the state simply has no one to regulate. In this case we are talking about replacing the whole variety of forms of ownership and ways of answering the question "What, how and for whom to produce?" one single form of ownership - state, and the answer to the main economic question- strict centralization and distribution. However, this system proved to be ineffective in practice. There remains a market path of development. But in a market economy, the state has to constantly adjust the depth of influence. The state does not face such tasks as the direct production and distribution of resources, goods and services. But it also does not have the right to freely dispose of resources, capital and produced goods, as is done in a distributive economy. In my opinion, the state must constantly balance, either increasing or decreasing the degree of intervention. market system- this is, first of all, flexibility and dynamism in decision-making both on the part of both consumers and producers. State policy simply has no right to lag behind changes in the market system, otherwise it will turn from an effective stabilizer and regulator into a bureaucratic superstructure that hinders the development of the economy.
1. HISTORY OF THE EVOLUTION OF IDEAS ABOUT THE ROLE OF THE STATE IN THE ECONOMY.
Mercantelists.
Story state regulation dates back to the end of the Middle Ages. At that time, the main economic school was the mercantelist school. It proclaimed the active intervention of the state in the economy. Mercantelists argued that the main indicator of a country's wealth is the amount of gold. In this regard, they called for encouraging exports and restraining imports.
classical theory.
The next step in the development of ideas about the role of the state was the work of A. Smith "A Study on the Nature and Causes of the Wealth of Nations", in which he argued that "the free play of market forces" (the principle of "laissez faire") creates a harmonious device "(Varga V. Rol states in a market economy, MEiMO N11, 1992, p.131).
In accordance with the classical approach, the state must ensure the safety of human life and property, resolve disputes, in other words, do what the individual is either unable to do on his own or does it inefficiently. In his description of the market economy system, Adam Smith argued that it is the desire of the entrepreneur to achieve his private interests that is the main driving force economic development, ultimately increasing the well-being of both himself and society as a whole.
The main point was that for all subjects economic activity the basic economic freedoms, namely the freedom to choose one's field of activity, the freedom to compete and the freedom to trade, must be guaranteed.
Keynesian theory.
In the 30s of our century, after the deepest recession in the US economy, John. Keynes put forward his theory, in which he refuted the views of the classics on the role of the state. Keynes's theory can be called "crisis" as he considers the economy in a state of depression. According to his theory, the state should actively intervene in the economy due to the absence of mechanisms in the free market that would truly ensure the economy's way out of the crisis. Keynes believed that the state should influence the market in order to increase demand, since the cause of capitalist crises is the overproduction of goods.
He offered several tools. This is a flexible monetary policy, a new budgetary and financial policy, etc. A flexible monetary policy makes it possible to step over one of the most serious barriers - wage inelasticity. This is achieved, Keynes believed, by changing the amount of money in circulation. With an increase money supply real wages will decrease, which will stimulate investment demand and employment growth. With the help of fiscal policy, Keynes recommended that the government increase tax rates and using these funds to finance unprofitable enterprises. This will not only reduce unemployment, but also relieve social tension.
The main features of the Keynesian model of regulation are:
- a high share of national income redistributed through the state budget;
- creation of a vast zone of state entrepreneurship on the basis of the formation of state and mixed enterprises;
- wide use of budgetary-financial and credit-financial regulators to stabilize the economic situation, smooth out cyclical fluctuations, maintain high growth rates and a high level of employment.
Keynes's model of government regulation helped dampen cyclical fluctuations for more than two decades after the war. However, since the early 1970s a discrepancy between the possibilities of state regulation and objective economic conditions began to appear. The Keynesian model could only be sustainable under conditions of high growth rates. High growth rates of national income created the possibility of redistribution without prejudice to capital accumulation. However, in the 1970s, the conditions for reproduction deteriorated sharply. Phillips' law was refuted, according to which unemployment and inflation cannot rise at the same time. Keynesian ways out of the crisis only spun the inflationary spiral. Under the influence of this crisis, a radical restructuring of the system of state regulation took place and a new, neo-conservative model of regulation took shape.
neoclassical theory.
Theoretical basis neoconservative model was served by the concepts of the neoclassical direction economic thought.
The transformation of the model of state regulation was to abandon the impact on reproduction through demand, and instead - the use of indirect measures to influence supply. Proponents of supply-side economics consider it necessary to recreate the classical mechanism of accumulation and to revive the freedom of private enterprise. Economic post is considered as a function of capital accumulation, which is carried out from two sources: at the expense of own funds, i.e. capitalization of part of the profit and at the expense of borrowed funds (credits). Therefore, in accordance with this theory, the state must provide conditions for the process of capital accumulation and increase the productivity of production.
The main obstacles on this path are high taxes and inflation. High taxes limit the growth of capital investment, and inflation increases the cost of credit and thus makes it difficult to use borrowed money for accumulation. Therefore, the neoconservatives proposed the implementation of anti-inflationary measures based on the recommendations of the monetarists and the provision of tax incentives to entrepreneurs.
Reducing tax rates will also reduce state budget revenues and increase its deficit, which will complicate the fight against inflation. Therefore, the next step will be to reduce public spending, stop using the budget to support demand and implement large-scale social programs. This includes the policy of privatization of state property.
The next set of measures is the implementation of the deregulation policy. This means the elimination of price and wage regulations, the liberalization (mitigation) of antitrust laws, the deregulation of the labor market, etc.
Thus, in the neoconservative model, the state can only indirectly influence the economy. The main role in the implementation of the country's economic development is given to market forces.
2. FUNCTIONS OF THE STATE IN THE ECONOMY.
State intervention in the economy pursues certain functions. As a rule, it corrects those “imperfections” that are inherent in the market mechanism and with which it is either unable to cope on its own, or this solution is ineffective. The state assumes responsibility for creating equal conditions for the rivalry of entrepreneurs, for effective competition, for limiting the power of monopolies. It also takes care of the production of a sufficient quantity of public goods and services, since market mechanism unable to adequately meet the collective needs of the people.
The participation of the state in economic life is also dictated by the fact that the market does not provide a socially just distribution of income. The state should take care of the disabled, the poor, the elderly. He also owns the sphere of fundamental scientific developments. This is necessary because for entrepreneurs it is very risky, extremely expensive and usually does not bring quick income. Since the market does not guarantee the right to work, the state has to regulate the labor market and take measures to reduce unemployment.
In general, the state implements the political and socio-economic principles of this community of citizens. It actively participates in the formation of macroeconomic market processes.
The role of the state in market economy manifests itself through the following important functions:
- creation legal basis for acceptance economic decisions. The state develops and adopts laws regulating entrepreneurial activity defines the rights and obligations of citizens;
- economic stabilization. The government uses fiscal and monetary policy to overcome the decline in production, to smooth out inflation, reduce unemployment, maintain a stable price level and the national currency;
- socially-oriented distribution of resources.
The state organizes the production of goods and services, which is not engaged in the private sector. It creates conditions for the development of agriculture, communications, transport, determines spending on defense, science, forms programs for the development of education, healthcare, etc.;
- provision of social protection and social guarantee.
The state guarantees minimum wages, old-age pensions, disability pensions, unemployment benefits, different kinds helping the poor, etc.
Antitrust regulation.
The antimonopoly activity of the state is one of the most important areas of application of state intervention. Regulation develops in two directions. In those few markets where conditions prevent the efficient functioning of the industry under competition, that is, in the so-called _natural monopolies., Public regulatory bodies are created by the state to control their economic behavior. In most other markets where monopoly has not become a necessity, public scrutiny has taken the form of antitrust laws. Next, the features of regulation of activities will be considered. natural monopolies.
A natural monopoly exists when one firm can supply the entire market with lower unit costs achieved through scale. This is typical for public utilities, where large-scale activities are necessary to achieve a low price.
Two options can be used to ensure acceptable behavior of such monopolies: state property and government regulation.
For natural monopolies, a "fair" return is usually set, that is, a price equal to the average gross cost. However, this entails a lack of incentive for the enterprise to reduce costs.
Thus, the purpose of industry regulation is to protect society from the market power of natural monopolies by regulating prices and quality of service. But it is necessary to use direct regulation only where it does not lead to a decrease in production efficiency. Regulation should not be applied in cases where competition can provide a better supply of products to society.
Another type of control is antitrust laws.
This form of control has rich history. In 1890 The famous Sherman Act was passed, prohibiting any kind of collusion and any attempt to monopolize any industry. However, this wording was rather vague, which did not allow a clear definition of the crime. The next step was the Clayton Act of 1914. In principle, it was a continuation of the Sherman law and only clarified some of its points.
In the same year, the Federal Trade Commission was created. Her competence included monitoring the implementation of the above laws, as well as investigating dishonest actions on her own initiative. The Federal Trade Commission Act expanded the range of illegal behavior and gave an independent antitrust authority the authority to conduct investigations.
A large number of antitrust laws and various amendments to them prove the extreme importance of these laws for society. Indeed, uncontrolled monopoly power can bring significant losses to society through the use of unfair competition, which will cause bankruptcy of small producers, consumer dissatisfaction with high prices, and often poor quality of goods, a lag in scientific and technological progress, and many other negative consequences. But, on the other hand, antitrust laws should not punish large producers who do not use illegal methods of competition. If this condition is not met, then the incentives for entrepreneurs to make their enterprise stronger and produce more products will be significantly reduced.
Thus, the state acts as an arbiter that selects the optimal (and most efficient) balance between monopolies and competitive industries. At various periods of history for various countries this ratio was different, adjusted to the specifics of the development of the economy, and the state must skillfully and effectively use this mechanism.
3. METHODS OF STATE IMPACT ON THE MARKET.
The state influences the market mechanism through its spending, taxation, regulation and public enterprise.
Government spending.
0 are considered one of the important elements macroeconomic policy. They affect the distribution of both income and resources. Government spending consist of government purchases and transfer payments. Government purchases are, as a rule, the purchase of public goods (defense costs, construction and maintenance of schools, roads, scientific centers, etc.). Transfer payments are payments that redistribute tax income received from all taxpayers, to certain segments of the population in the form of unemployment benefits, disability payments, etc. It should be noted that public procurement contributes to national income and directly use resources, while transfers do not use resources and are not related to production. Government purchases lead to a redistribution of resources from private to public consumption of goods. They enable citizens to enjoy public goods. Transfer payments have a different meaning: they change the structure of the production of consumer goods. Amounts taken in the form of taxes from some segments of the population are paid to others. However, those to whom transfers are intended spend this money on other goods, and this is how the change in the structure of consumption is achieved.
Another important instrument of state policy is taxation. Taxes are the main source budget funds. In countries with a market economy, various types of taxes are levied. Some of them are visible, for example income tax, others are not so obvious, as they are imposed on producers of raw materials and affect households indirectly in the form of higher commodity prices. Taxes cover both households and firms. In the form of taxes, significant amounts enter the budget (for example, in the United States, about 30 percent of the total cost of goods and services produced).
One of the main problems is the fair distribution of the tax burden. There are three main systems based on the concept of progressive taxation.
- the ratio of the amount levied in the form of tax on the income of a particular employee to the value of this income.
- proportional tax (the amount of tax is proportional to the income of the employee);
- regressive tax (as a percentage, the tax is levied the lower, the higher the income of the employee);
- progressive tax(as a percentage, the higher the income, the higher the tax).
It seems to me that a progressive tax is the most fair, but the percentage increase in the tax should not be significant so as not to weaken the incentives to work, and therefore to higher earnings. As a rule, income tax is built on this principle. However, sales taxes and excise taxes are in fact regressive, as they are in most cases passed on to consumers, in whose income the same amount occupies a different share.
The task of the state is to collect taxes in such a way as to meet the needs of the budget and at the same time not cause discontent among taxpayers. When tax rates are too high, massive tax evasion begins. On the present stage This is exactly the situation in Russia.
The state does not have enough funds, it raises taxes, entrepreneurs increasingly evade paying them, therefore, less and less funds go to the budget. The government raises taxes again. It turns out a vicious circle. I believe that in this situation it is reasonable to lower taxes. This will reduce incentives for non-payment, make honest business more profitable, lead to higher government revenues and reduce the level of criminalization of business.
State regulation.
It is designed to coordinate economic processes and link private and public interests. It is carried out in legislative, tax, credit and subvention forms. Legislative form regulation governs the activities of entrepreneurs. Antitrust laws are an example. Tax and credit forms of regulation involve the use of taxes and credits to influence the national output.
By changing tax rates and benefits, the government affects the narrowing or expansion of production. When changing the terms of credit, the state affects the decrease or increase in production.
The subvention form of regulation involves the provision of state subsidies or tax benefits to certain industries or enterprises. These usually include industries that form the general conditions for the formation of social capital (infrastructure). On the basis of subsidies, support can also be provided in the field of science, education, training, and in solving social programs. There are also special or targeted subsidies that provide for spending budget funds on strictly defined programs. The share of subventions in the GNP of developed countries is 5-10 percent. By allocating subsidies, reducing tax rates, the state thereby changes the distribution of resources, and subsidized industries are able to recover costs that cannot be covered at market prices.
State business.
It is carried out in those areas where economics is contrary to the nature of private firms or where huge investments and risks are required. The main difference from private entrepreneurship is that the primary goal of state entrepreneurship is not to generate income, but to solve social and economic problems, such as ensuring the necessary growth rates, smoothing out cyclical fluctuations, maintaining employment, stimulating scientific and technological progress, etc. d. This form of regulation provides support for unprofitable enterprises and sectors of the economy that are vital for reproduction. These are, first of all, branches of economic infrastructure (energy, transport, communications). The problems solved by state entrepreneurship also include the provision of benefits to the population in various areas of social infrastructure, assistance to vital science and capital-intensive sectors of the economy in order to accelerate scientific and technological progress and, on this basis, strengthen the country's position in the world economy, regional policy- construction in economically backward areas industrial enterprises, job creation, environmental protection through the introduction of non-waste technologies, the construction of treatment facilities, the development of fundamental scientific research, the production of goods, which is a state monopoly by law.
I believe that state entrepreneurship should develop only in those areas where there is simply no other way out. The fact is that, compared with private state enterprises are less efficient. A state enterprise, even if endowed with the broadest rights and responsibilities, always lags behind a private enterprise in terms of economic independence. In the activities of the state enterprise, there are certainly both market and non-market motives coming from the state. Political motives are changeable, they depend on the government, orders of the ministries, etc. Therefore, SOEs often find themselves in a complex and unclear environment, which is much more difficult to predict than market conditions. It is much easier to predict probable fluctuations in demand and prices than to predict the behavior of a new minister or official, whose decisions often determine the fate of an enterprise. They may have political goals behind them that have nothing to do with market behavior (the desire to increase budget revenues, the desire to retain staff and increase wages, etc.).
As a rule, state-owned enterprises are not ready for market competition, since they rely not only on themselves, but also on special treatment from the authorities (subsidies, tax incentives, sales guarantees within the framework of state orders). State-owned enterprises have no obligations to shareholders; they usually do not face bankruptcy. All this negatively affects the dynamics of costs and prices, the speed of mastering new technologies, the quality of production organization, etc.
Competition in the field commercial activities also unacceptable because the private sector is drawn into corruption: through a bribe to an official, you can achieve greater results than by reducing costs.
If the economy is burdened with an excess of state-owned enterprises, their workers are in a difficult position. They are the first victims of government policy aimed at overcoming emergencies. Usually people working in the public sector are the first to feel the freeze on wages. Apparently, this is why the wave of privatization that swept through the economies of Western countries in the 1980s did not cause widespread protests on the part of the bulk of those employed in the public sector. People expected that, having freed themselves from state pressure, they would be able to fully use the advantages of a market economy and become co-owners of private enterprises.
4. PROBLEMS AND LIMITATIONS OF STATE INTERVENTION.
Obviously, the modern market system is unthinkable without state intervention. However, there is a line beyond which deformations of market processes occur, production efficiency falls. Then, sooner or later, the question arises of the denationalization of the economy, ridding it of excessive state activity. There are important limits to regulation. For example, any actions of the state that destroy the market mechanism (total directive planning, all-encompassing administrative control over prices, etc.) are unacceptable.
This does not mean that the state absolves itself of responsibility for the uncontrolled rise in prices and should abandon planning. The market system does not exclude planning at the level of enterprises, regions, and even National economy; however, in the latter case, it is usually "soft", limited in terms of time, scope and other parameters, and acting in the form of national targeted programs. It should also be noted that the market is largely a self-adjusting system, and therefore it should be influenced only by indirect, economic methods. However, in some cases, the use administrative methods not only acceptable, but necessary. One cannot rely only on economic or only on 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, not before 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, say, to direct control over prices, the state creates a special economic regime for producers, forces them to revise production programs, look for new sources of investment financing, etc.
Among the methods of state regulation, there are no completely unsuitable and absolutely ineffective. Everyone is needed, and the only question is to determine for each those situations where its use is most appropriate. Economic losses begin when the authorities go beyond the bounds of reason, giving excessive preference to either economic or administrative methods.
We must not forget that the economic regulators themselves should be used with extreme caution, without weakening or replacing market incentives. If the state ignores this requirement, launches regulators without thinking about how their action will affect the market mechanism, the latter begins to falter.
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, bringing a positive effect in one area of the economy, will certainly give Negative consequences in others. Nothing can be changed here. The state using economic instruments of regulation 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 combating inflation, this measure is effective, but it leads to an increase in the cost of central and bank credit. What if interest rates grow, it becomes more and more difficult to finance investments, economic development begins to slow down. This is how the situation is developing in Russia.
Deregulation and privatization.
State intervention in the economy requires quite large expenditures. They include both direct costs (preparation of legislative acts and control over their execution) 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, for the entry of new competitors into the industry, since this requires the permission of the relevant commission.
According to American experts, the state impact on economic life leads to a drop in growth rates by 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 last years the issue of deregulation of the economy and privatization has become more acute. Deregulation involves the removal of legislative acts that hinder the entry of potential competitors into the market, set 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 decreased and passenger service has improved. The deregulation of freight, air and rail transport has brought benefits to the American society, estimated at $39-63 billion, $15 billion, respectively. and 9-15 billion dollars. per year (Economic Report of the President, Wash., 1989. P. 188).
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 are unprofitable and inefficient. Western economists point out that government sector does not provide such a powerful incentive to reduce costs and obtain powerful profits, as does private enterprise.
For an entrepreneur - one of two things: profit or loss. If a private enterprise suffers losses for a long time, then it is closed. A state-owned enterprise is assisted, so it may not seek to increase its profitability.
This once again proves that state intervention is needed only where it is vital. In all other cases, the market will more effectively solve the set economic tasks.
State regulation in agriculture.
In the modern Western economy, agriculture is one of the most important areas of active intervention. In this area of production main principle free market, namely the game of supply and demand, is practically inapplicable.
True, state intervention is far from a panacea. For example, in Western Europe, governments traditionally pay 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, due to high labor productivity, the 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 technological 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 rural population;
c) stabilization of markets for agricultural products;
d) guaranteed supply of the domestic market;
e) concern for the supply of agricultural products to consumers at "reasonable prices". (V. Varga "The role of the state in the market economy" - MEiMO, 1992, N 11, p. 139.)
The state establishes and annually reviews the minimum prices for the most important agricultural products. Thus, producers are protected from a sharp drop in prices. In the same time domestic market protected from cheap imports and excessive price fluctuations through a system of additional import duties. Therefore, in the EU countries, food prices are noticeably higher than world market prices. Expenses in connection with the implementation of the agrarian policy shall be borne by the state budget.
The functioning of this mechanism can be illustrated by the example of the grain market. The starting point is the approximate price recommended by the state. It somewhat exceeds the market price, which not only guarantees the income of farmers, 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 farmers is bought up by the state at the so-called "intervention price" in unlimited quantities.
Thus, although each producer must bear the marketing risk himself, in practice 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 an import duty is imposed on imports, equating the price of the product with the domestic price. When exporting, the state pays the exporters the difference between the domestic price and the world market price.
It should be noted that this policy caused a lot of problems. On the one hand, huge stocks of food have been accumulated, on the other hand, the discontent of the peasants, who believe that they are not provided with living wage. In this situation, large agro-industrial enterprises receive decent incomes, while small producers barely make ends meet.
Thus, agriculture remains a weak point of state regulation. However, apparently, the state of affairs in agriculture will remain unchanged.
CONCLUSION.
The study of this topic provides abundant food for thought. Very often, the state is the root cause of changes in the economic behavior of entrepreneurs. Decisions made by the government influence decisions made (or not made) at the micro level. Government policy achieves its goal only when it encourages and does not dictate. 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 more accessible to entrepreneurs that sector of the economy, which is the highest priority for it.
It should be noted that the state should not interfere in those economic spheres where his intervention is not necessary. This is not only unnecessary, but also harmful to the economy.
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, provides for the needs of society in public goods, provides social protection low-income segments of the population, solves issues of national defense. On the other hand, government intervention can, in some cases, noticeably weaken the market mechanism and cause significant harm to the country's economy, as was the case in France in the late 1970s and early 1980s. Due to too active government intervention, capital outflow began from the country, and economic growth rates dropped noticeably. In this case, privatization and deregulation are necessary, which was done in 1986.
It seems to me that the main task of the state is to keep the "golden mean" in the sphere of influence on the market economy.
LIST OF USED LITERATURE.
- V. Papava "The role of the state in the modern economic system", Questions of Economics, N 11, 1993.
- Livshits "The State in a Market Economy", Russian Economic Journal, N 11-12, 1992, N1, 1993.
- S. Holland "Planning and mixed economy", Questions of Economics, N 1, 1993.
- V. Varga "The role of the state in the market economy", MEiMO, N 10-11, 1992.
- Zastavenko, Reisberg " State programs and the market", The Economist, N 3, 1991.
- I.P. Merzlyakov "On the formation of a market economy", Finance, N 1, 1994.
- E. Chuvilin, V. Dmitrieva "State regulation and price control in capitalist countries", Moscow, "Finance and Statistics", 1991.
- K. McConnell, S. Brew "Economics", Tallinn, 1993.
- V. Maksimova, A. Shishov "Market economy. Textbook", Moscow, SOMINTEK, 1992.
Social policy - a set of measures aimed at creating conditions for meeting the needs of the population, improving its well-being and providing a system of social guarantees.
Social policy comes down to state assistance to a socially equitable distribution of income under market conditions in a mixed economy. It took a long time for the countries with market economies to recognize that the distribution of income is fair from the point of view of the market is unfair from the point of view of the universal. In market conditions, there is only one criterion of justice: any income received in free competition in the market of goods, services, capital and labor is recognized as fair.
Fair from a market point of view high income those who succeeded, the low ones - those who went bankrupt, failed.
Even in the United States relatively recently (since 1937) a law on social security began to operate. His goal was to protect the American people from the economic hardship caused by old age and unemployment.
This system consists of 3 parts:
- Pension insurance old age and survivors' insurance;
- unemployment insurance;
- Issuance of allowances for the elderly and other forms of social security. AT economics It is generally accepted that technological progress and economic growth contribute to the growth of the well-being of members of society, but in reality everything is quite different. For example, in 1900, the average per capita income per year for Africa as a whole was 500 US dollars and was 9 times lower than in England (the richest country of that time). And in 2000, the average African per capita income was $1,290, lower than the average per capita income of the country itself. rich country The US is already almost 20 times. (ME and MO, No. 1, 2001, p. 7-8). But even in the United States itself in 1998, 12.7% of the population was below the poverty line (ME&MO, No. 8, 2000, p. 84).
And yet, it cannot be denied that social policy depends on the results of economic growth and is modern society the goal of economic growth.
Social policy is carried out at different levels of economic activity:
- at the firm level;
- at the regional level;
- at the national level;
- At the interstate level (UNESCO, UN).
To measure the standard of living, the starting point is taken " consumer basket", which includes a set of goods and services that provides a certain level of consumption. There is a "minimum level" of consumption and a "rational level" of consumption.
"Minimum level" - such a consumer set, the reduction of which puts the consumer beyond the bounds of ensuring normal conditions for his existence, i.e. below the poverty line.
”Rational level of consumption” - reflects the amount and structure of consumption that is most favorable for a person.
To develop a social policy, it is also necessary to use an indicator of the quality of life of the population.
To determine the quality of life, such indicators are used. as: 1. Working conditions and safety; 2. The state of the habitat; 3. Availability of free time for employees; 4. Cultural level of the population; 5. Physical development and health of citizens; 6. Personal and property security of members of the society.
In any modern state there is a difference in income and wealth.
Income - amount Money. received for a certain period of time and intended for the acquisition of goods and services for personal consumption.
Wealth is the wealth accumulated by the family financial resources. as well as real estate and durable goods.
The Lorenz curve is used to measure the degree of inequality in the distribution of income in a society.
Lorenz curve
The proportion of families (100%) is located on the abscissa. on the y-axis is the share of income (100%). The theoretical possibility of absolute equality is represented by the bisector OA. This means. that 10% of the population should receive 10% of all income. and 20% of the population - 20% of income. However, in real life, things look different. for example. 60% of the population receive 40% of the income. and 80% of the population receive less than 60% of income.
The Lorenz curve is represented by an arcuate "L" curve. The greater the bend in the arc, the greater the degree of inequality in society. However, the state can progressive taxation reduce the level of inequality between the rich and the poor. This is shown in Graph 1. Originally, the Lorenz curve was represented by the "L" curve. and then as a result of state social policy it will be an "L" curve", i.e. inequality will decrease.
The quantitative degree of inequality in the distribution of income can be calculated using the Gini coefficient.
KG=L/OBA. where L is the area of the shaded area;
OVA - the rest of the triangle.
The Gini coefficient is in the range between 0 and 1. In the Republic of Belarus, the Gini coefficient was 0.270 in 2000 (Statistical Yearbook, 2001, Mn. Min. Statistics and Analysis of the Republic of Belarus, 2001, p. 138).
In addition, to assess the differentiation of income is widely used decile coefficient.
The decile coefficient expresses the ratio between the average incomes of the 10% of the highest paid citizens of a given country and the 10% of the poorest citizens. In the Republic of Belarus, the decile coefficient was in 2000
- (ibid., p. 138).
- Creation of targeted social protection;
- Streamlining benefits, allowances and additional payments paid at the expense of enterprises and organizations by including them in tariff rates and official salaries;
- Providing guarantees for citizens in the field of labor, social protection, education, health protection, culture, housing.
- Normalization demographic situation, increased life expectancy, reduced mortality.
- Ensuring effective employment of the population, improving the quality and competitiveness of the workforce;
- Creation of economic and legal conditions for increasing labor activity, developing entrepreneurship and business initiative of the able-bodied population;
- Raising the living standards of the population;
- Improvement and effective development social environment; Priority attention should be paid to improving the healthcare system as one of the most important priority areas of the country's socio-economic development. The main goal here is to meet the needs of the population in affordable medical and drug care.
Source: Svetlitsky IS Economic theory: Electronic educational and methodical complex for students of all non-economic specialties. - Minsk: BSUIR. - 286 p. 2006(original)
More on the topic Necessity and essence of the social policy of the state in a market economy. income inequality. Lorenz curve. Gini coefficient:
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- 2.2. Necessity and essence of state regulation of property in a market economy. Denationalization and privatization
- Chapter 1.6. THE ROLE OF THE STATE IN SOCIAL POLICY. FEATURES OF THE STATE AS A SUBJECT OF SOCIAL POLICY AND ITS CONSTITUTIONAL OBLIGATIONS IN THIS SPHERE
- THE CRISIS OF ADMINISTRATIVE-PLANNING SYSTEMS AND THE NEED TO TRANSITION TO A MARKET SYSTEM THE OBJECTIVES OF MACROECONOMIC STABILIZATION IN THE TRANSITION TO A MARKET SYSTEM INSTITUTIONAL TRANSFORMATIONS IN THE TRANSITION TO A MARKET SYSTEM SOCIAL POLICY IN THE TRANSITION TO A MARKET SYSTEM
The policy of the state covers not only the most fundamental areas of development and i society but also specific h tasks facing individual sphere m and public th life. In accordance with this, the policy of the state is distinguished: internal and external, economic m political and social, policy on the issue m development of the political system of society and the state, national and cultural policy, environmental and defense. Often resort to more fractional m division, considering especially, for example, agrarian, technical to uh, demographic, personnel policy etc. Since all areas and parties public life are interconnected, insofar as, accordingly, all these directions closely interact political activity states. Due to the frequent interweaving and "interpenetration", their distinction is often rather arbitrary. However, among them there is a direction that is most closely related to the entire complex of needs. n awns and interests of man. This is a policy addressed to the social sphere - social policy.
Social politics is the activity of the state public organizations and charitable foundations, which is aimed at meeting the needs of the population and is implemented through social sphere. The objects of social policy are: the position of classes and social groups, nations and nationalities, an individual family, the position of a person in society and all aspects of people's well-being. It follows that social policy is a capacious concept. In a broad sense, it should cover all aspects of people's lives: improving working and living conditions, implementing the principle of social justice , social protection and guarantee t ii population, problem m employment, satisfaction of the material and spiritual needs of a person, improvement of national relations, etc. The main goal of social policy is to increase the level and quality and and h nor citizens of Russia on the basis of stimulating the labor and economic activity of the population, providing each m an able-bodied person has conditions that allow his m labor m and entrepreneurship to ensure the well-being of the family. At the same time, the state fully retains its social obligations to pensioners, the disabled, large families, disabled citizens. The social policy pursued so far in our country does not meet the requirements of its target setting: the absence Yu t clear criteria for social guidelines, the mechanism for implementing social policy has not been developed and, as a result, the extremely low efficiency of its implementation. The assertion that social development society, increasing the people's well-being is the main goal social production and the basis of state policy, for many years it was only a theoretical postulate, largely divorced from real life. h neither. This can be confirmed by the low standard of living population compared to developing countries. The social situation continues to be tense and more and more complicated. Unemployment is growing and its hidden forms are developing (3-4-day employment, six-month vacations, reduced shifts, etc.). For some expert opinion, real unemployment is more than 10-1 2 million people. Moreover, we are talking about unemployment among the most highly professional workforce is far from old age. O here - re h some decrease in material well-being, apathy, disbelief, stress, an increase in crime. The intellectual part of society, military personnel, women, children and old people are in a difficult situation. rises incidence and mortality, falls birth m awn. The level of real incomes of the population in monetary terms m expression is currently 40% lower than m in 1991 m mass poverty, the number of citizens, and m those with incomes below the subsistence level m ini m mind, is about 25% of the population of Russia. The differentiation of incomes has intensified, the illegal and non-labor basis has become sharply m essential and social stratification.
The way out is to improve the country's economy and revitalize the conditions for social activity, which allow solving these and other pressing problems of the life of the population.
In recent years, even in some developed countries, there has been a deepening of inequality in the distribution of income. There is no need to talk about Russia.
Closely related to the problem of inequality is the question of poverty. Can poverty be defined? Obviously. It is possible to mark those boundaries family income behind which the reproduction of the population is not ensured. This level should act as a mini m the mind of material security, or the subsistence minimum (the so-called threshold or poverty line). More than 30% of Russians are below the poverty line. All population groups living below this line are poor.
The poverty line in the United States is determined by the Department of Commerce, based on and s necessary m th objective human needs and the cost of living for certain period. So, in 1990, the poverty line was estimated for a family of one person at 7740 dollars a year, for two people - 104 2$6, $13,078 out of three, $15,730 out of four
on employment, training, retraining and conditions m labor;
on the use of services of communication institutions and sports - health institutions;
for receiving services social services, co c legal and legal m osh.
3) ensuring the safety of the environment and maintaining the environment as necessary m ohm level;
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INTRODUCTION
The problem of state intervention in the economy is the main one for any state, regardless of whether it is a market economy or a distribution economy. In a distributive economy, everything is simpler: the state assumes all rights and obligations for the production and distribution of goods and services. That is, there is no need to talk about regulation: the state simply has no one to regulate. In this case, we are talking about replacing the entire variety of forms of ownership and ways of answering the question "What, how and for whom to produce?" with one single form of state ownership, and the answer to the basic economic question is strict centralization and distribution. However, this system proved to be ineffective in practice. There remains a market path of development. But in a market economy, the state has to constantly adjust the depth of influence. The state does not face such tasks as the direct production and distribution of resources, goods and services. But it also does not have the right to freely dispose of resources, capital and produced goods, as is done in a distributive economy. The state must constantly balance, now increasing, then decreasing the degree of intervention. The market system is, first of all, flexibility and dynamism in decision-making both on the part of both consumers and producers. State policy simply has no right to lag behind changes in the market system, otherwise it will turn from an effective stabilizer and regulator into a bureaucratic superstructure that hinders the development of the economy.
1. HISTORY OF THE EVOLUTION OF IDEAS ABOUT THE ROLE OF THE STATE IN THE ECONOMY.
A) Mercantilists.
The history of state regulation dates back to the end of the Middle Ages. At that time, the main economic school was the mercantilist school. It proclaimed the active intervention of the state in the economy. Mercantilists argued that the main indicator of a country's wealth was the amount of gold. In this regard, they called for encouraging exports and restraining imports.
B) Classical theory.
The next step in the development of ideas about the role of the state was the work of A. Smith "A Study on the Nature and Causes of the Wealth of Nations", in which he argued that "the free play of market forces" (the principle of "laissez faire") creates a harmonious device" (Varga V. Rol states in a market economy, MEiMO N11, 1992, p.131).
In accordance with the classical approach, the state must ensure the safety of human life and property, resolve disputes, in other words, do what the individual is either unable to do on his own or does it inefficiently. In his description of the market economy system, Adam Smith argued that it is the desire of the entrepreneur to achieve his private interests that is the main driving force of economic development, ultimately increasing the well-being of both himself and society as a whole.
The main point was that all economic entities should be guaranteed basic economic freedoms, namely the freedom to choose the sphere of activity, freedom of competition and freedom of trade.
C) Keynesian theory.
In the 30s of our century, after the deepest recession in the US economy, John. Keynes put forward his theory, in which he refuted the views of the classics on the role of the state. Keynes's theory can be called "crisis" as he considers the economy in a state of depression. According to his theory, the state should actively intervene in the economy due to the absence of mechanisms in the free market that would truly ensure the economy's way out of the crisis. Keynes believed that the state should influence the market in order to increase demand, since the cause of capitalist crises is the overproduction of goods. He offered several tools. This is a flexible monetary policy, a new budgetary and financial policy, etc. A flexible monetary policy makes it possible to step over one of the most serious barriers - wage inelasticity. This is achieved, Keynes believed, by changing the amount of money in circulation. With an increase in the money supply, real wages will decrease, which will stimulate investment demand and employment growth. With the help of fiscal policy, Keynes recommended that the state increase tax rates and use these funds to finance unprofitable enterprises. This will not only reduce unemployment, but also relieve social tension.
The main features of the Keynesian model of regulation are:
A high share of national income redistributed through the state budget;
Creation of a vast zone of state entrepreneurship based on the formation of state and mixed enterprises;
Widespread use of fiscal and credit-financial regulators to stabilize the economic environment, smooth out cyclical fluctuations, maintain high growth rates and a high level of employment.
Keynes's model of government regulation helped dampen cyclical fluctuations for more than two decades after the war. However, since the early 1970s a discrepancy between the possibilities of state regulation and objective economic conditions began to appear. The Keynesian model could only be sustainable under conditions of high growth rates. high rates growth of national income created the possibility of redistribution without prejudice to the accumulation of capital. However, in the 1970s, the conditions for reproduction deteriorated sharply. Phillips' law was refuted, according to which unemployment and inflation cannot rise at the same time. Keynesian ways out of the crisis only spun the inflationary spiral. Under the influence of this crisis, a radical restructuring of the system of state regulation took place and a new, non-conservative model of regulation took shape.
D) Neoclassical theory.
The theoretical basis of the neoconservative model was the concept of the neoclassical direction of economic thought. The transformation of the model of state regulation was to abandon the impact on reproduction through demand, and instead use indirect measures to influence supply. Proponents of supply-side economics consider it necessary to recreate the classical mechanism of accumulation and to revive the freedom of private enterprise. The economic post is considered as a function of the accumulation of capital, which is carried out from two sources: at the expense of own funds, i.e. capitalization of part of the profit, and at the expense of borrowed funds (credits). Therefore, in accordance with this theory, the state must provide conditions for the process of capital accumulation and increase the productivity of production.
The main obstacles on this path are high taxes and inflation. High taxes limit the growth of capital investment, and inflation increases the cost of credit and thus makes it difficult to use borrowed funds for accumulation. Therefore, the neoconservatives proposed the implementation of anti-inflationary measures based on the recommendations of the monetarists and the provision of tax incentives to entrepreneurs.
Reducing tax rates will reduce both state budget revenues and increase its deficit, which will complicate the fight against inflation. Therefore, the next step will be to reduce public spending, stop using the budget to support demand and implement large-scale social programs. This includes the policy of privatization of state property.
The next set of measures is the implementation of the deregulation policy. This means the elimination of price and wage regulations, the liberalization (mitigation) of antitrust laws, the deregulation of the labor market, etc.
Thus, in the neoconservative model, the state can only indirectly influence the economy. The main role in the implementation of the country's economic development is given to market forces.
2. FUNCTIONS OF THE STATE IN THE ECONOMY.
State intervention in the economy pursues certain functions. As a rule, it corrects those “imperfections” that are inherent in the market mechanism and with which it is either unable to cope on its own, or this solution is ineffective. The state assumes responsibility for creating equal conditions for the rivalry of entrepreneurs, for effective competition, for limiting the power of monopolies. It also takes care of the production of a sufficient quantity of public goods and services, since the market mechanism is unable to properly meet the collective needs of people. The participation of the state in economic life is also dictated by the fact that the market does not provide a socially just distribution of income. The state should take care of the disabled, the poor, the elderly. He also owns the sphere of fundamental scientific developments. This is necessary because it is very risky for entrepreneurs, extremely expensive, and usually does not bring quick profits. Since the market does not guarantee the right to work, the state has to regulate the labor market and take measures to reduce unemployment.
In general, the state implements the political and socio-economic principles of this 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 the following key functions:
A) creation of a legal basis for making economic decisions. The state develops and adopts laws regulating entrepreneurial activity, determines the rights and obligations of citizens;
B) stabilization of the economy. The government uses fiscal and monetary policy to overcome the decline in production, to smooth out inflation, reduce unemployment, maintain a stable price level and the national currency;
C) socially oriented distribution of resources. The state organizes the production of goods and services, which is not engaged in the private sector. It creates conditions for the development of agriculture, communications, transport, determines spending on defense, science, forms programs for the development of education, health care, etc.;
D) ensuring social protection and social guarantees. The state guarantees a minimum wage, old-age pensions, disability pensions, unemployment benefits, various types of assistance to the poor, etc.
Antitrust regulation.
The antimonopoly activity of the state is one of the most important areas of application of state intervention. Regulation develops in two directions. In those few markets where conditions prevent the efficient functioning of the industry under competition, that is, in the so-called natural monopolies, public regulatory bodies are created by the state to control their economic behavior. In most other markets where monopoly has not become a necessity, public scrutiny has taken the form of antitrust laws. Further, the features of regulation of the activities of natural monopolies will be considered.
A natural monopoly exists when one firm can supply the entire market with lower unit costs achieved through scale. This is typical for public utilities, where large-scale activities are necessary to achieve a low price.
Two options can be used to ensure the acceptable behavior of such monopolies: state ownership and state regulation.
For natural monopolies, a "fair" income is usually set, that is, a price equal to the average gross cost. However, this entails a lack of incentive for the enterprise to reduce costs.
Thus, the purpose of industry regulation is to protect society from the market power of natural monopolies by regulating prices and quality of service. But it is necessary to use direct regulation only where it does not lead to a decrease in production efficiency. Regulation should not be applied in cases where competition can provide a better supply of products to society.
Another type of control is antitrust laws. This form of control has a rich history. In 1890 The famous Sherman Act was passed, prohibiting any kind of collusion and any attempt to monopolize any industry. However, this wording was rather vague, which did not allow a clear definition of the crime. The next step was the Clayton Act of 1914. In principle, it was a continuation of the Sherman law and only clarified some of its points.
In the same year, the Federal Trade Commission was created. Her competence included monitoring the implementation of the above laws, as well as investigating dishonest actions on her own initiative. The Federal Trade Commission Act expanded the range of illegal behavior and gave an independent antitrust authority the authority to conduct investigations.
A large number of antitrust laws and various amendments to them prove the extreme importance of these laws for society. Indeed, uncontrolled monopoly power can bring significant losses to society through the use of unfair competition, which will cause bankruptcy of small producers, consumer dissatisfaction with high prices, and often poor quality of goods, a lag in scientific and technological progress, and many other negative consequences. But, on the other hand, antitrust laws should not punish large producers who do not use illegal methods of competition. If this condition is not met, then the incentives for entrepreneurs to make their enterprise stronger and produce more products will be significantly reduced.
Thus, the state acts as an arbiter that selects the optimal (and most efficient) balance between monopolies and competitive industries. In different periods of history, this ratio was different for different countries, adjusted to the specifics of economic development, and the state must skillfully and effectively use this mechanism.
3. METHODS OF STATE INFLUENCE ON THE MARKET
The state influences the market mechanism through its spending, taxation, regulation, and public enterprise.
Government spending. 0 are considered one of the important elements of macroeconomic policy. They affect the distribution of both income and resources. Government spending consists of government purchases and transfer payments. Government purchases are, as a rule, the acquisition of public goods (defense costs, the construction and maintenance of schools, roads, scientific centers, etc.). Transfer payments are payments that redistribute tax revenues received from all taxpayers to certain segments of the population in the form of unemployment benefits, disability payments, etc. It should be noted that public procurement contributes to national income and directly uses resources, in while transfers do not use resources and are not related to production. Government purchases lead to a redistribution of resources from private to public consumption of goods. They enable citizens to enjoy public goods. Transfer payments have a different meaning: they change the structure of the production of consumer goods. Amounts taken in the form of taxes from some segments of the population are paid to others. However, those to whom transfers are intended spend this money on other goods, and this is how the change in the structure of consumption is achieved.
Another important instrument of state policy is taxation. Taxes are the main source of budget funds. In countries with a market economy, various types of taxes are levied. Some are visible, such as an income tax, while others are less obvious as they are imposed on producers of raw materials and affect households indirectly through higher commodity prices. Taxes cover both households and firms. Significant sums enter the budget in the form of taxes (for example, in the USA, about 30 percent of the total cost of goods and services produced).
One of the main problems is the fair distribution of the tax burden. There are three main systems based on the concept of progressiveness of taxation of the ratio of the amount levied in the form of tax on the income of a particular employee to the amount of this income:
Proportional tax (the amount of tax is proportional to the income of the employee);
Regressive tax (as a percentage, the tax is levied the lower, the higher the income of the employee);
Progressive tax (as a percentage, the higher the income, the higher the tax).
It seems to me that a progressive tax is the most fair, but the percentage increase in the tax should not be significant so as not to weaken the incentives for work, and, consequently, for higher earnings. As a rule, income tax is built on this principle. However, sales taxes and excise taxes are in fact regressive, as they are in most cases passed on to consumers, in whose income the same amount occupies a different share.
The task of the state is to collect taxes in such a way as to meet the needs of the budget and at the same time not cause discontent among taxpayers. When tax rates are too high, massive tax evasion begins. At the present stage, such a situation is taking place in Russia. The state does not have enough funds, it raises taxes, entrepreneurs increasingly evade paying them, therefore, less and less funds go to the budget. The government raises taxes again. It turns out a vicious circle. I believe that in this situation it is reasonable to lower taxes. This will reduce incentives for non-payment, make honest business more profitable, lead to higher government revenues and reduce the level of criminalization of business.
State regulation. It is designed to coordinate economic processes and link private and public interests. It is carried out in legislative, tax, credit and subvention forms. The legislative form of regulation regulates the activities of entrepreneurs. Antitrust laws are an example. Tax and credit forms of regulation involve the use of taxes and credits to influence the national output. By changing tax rates and benefits, the government affects the narrowing or expansion of production. When changing the terms of credit, the state affects the decrease or increase in production.
The subvention form of regulation involves the provision of state subsidies or tax benefits to certain industries or enterprises. These usually include industries that form the general conditions for the formation of social capital (infrastructure). On the basis of subsidies, support can also be provided in the field of science, education, training, and in solving social programs. There are also special or targeted subsidies that provide for the expenditure of budget funds for strictly defined programs. The share of subventions in the GNP of developed countries is 510 percent. By allocating subsidies, reducing tax rates, the state thereby changes the distribution of resources, and subsidized industries are able to recover costs that cannot be covered at market prices.
State business. It is carried out in those areas where economics is contrary to the nature of private firms or where huge investments and risks are required. The main difference from private entrepreneurship is that the primary goal of state entrepreneurship is not to generate income, but to solve social and economic problems, such as ensuring the necessary growth rates, smoothing out cyclical fluctuations, maintaining employment, stimulating scientific and technological progress, etc. This form regulation provides support for unprofitable enterprises and sectors of the economy that are vital for reproduction. These are, first of all, branches of economic infrastructure (energy, transport, communications). The problems solved by state entrepreneurship also include the provision of benefits to the population in various areas of social infrastructure, assistance to vital science and capital-intensive sectors of the economy in order to accelerate scientific and technological progress and, on this basis, strengthen the country's position in the world economy, the implementation of a regional policy of construction in economically backward areas industrial enterprises, creation of jobs, environmental protection through the introduction of non-waste technologies, the construction of treatment facilities, the development of fundamental scientific research, the production of goods, which is a state monopoly by law.
I believe that state entrepreneurship should develop only in those areas where there is simply no other way out. The fact is that compared to private state-owned enterprises are less efficient. A state enterprise, even if endowed with the broadest rights and responsibilities, always lags behind a private enterprise in terms of economic independence. In the activities of the state enterprise, there are certainly both market and non-market motives coming from the state. Political motives are changeable, they depend on the government, orders of ministries, etc. Therefore, SOEs often find themselves in a complex and unclear environment, which is much more difficult to predict than market conditions. It is much easier to predict probable fluctuations in demand and prices than to predict the behavior of a new minister or official, whose decisions often determine the fate of an enterprise. They may have political goals behind them that have nothing to do with market behavior (the desire to increase budget revenues, the desire to retain staff and increase wages etc.).
As a rule, state-owned enterprises are not ready for market competition, since they rely not only on themselves, but also on special treatment from the authorities (subsidies, tax breaks, sales guarantees under government orders). State-owned enterprises have no obligations to shareholders; they usually do not face bankruptcy. All this negatively affects the dynamics of costs and prices, the speed of mastering new technologies, the quality of production organization, etc.
Competition in the sphere of commercial activities is also unacceptable because the private sector is drawn into corruption: through a bribe to an official, more results can be achieved than by reducing costs.
If the economy is burdened with an excess of state-owned enterprises, their workers are in a difficult position. They are the first victims of government policy aimed at overcoming emergencies. Usually people working in the public sector are the first to feel the freeze on wages. Apparently, this is why the wave of privatization that swept through the economies of Western countries in the 1980s did not cause widespread protests on the part of the bulk of those employed in the public sector. People expected that, having freed themselves from state pressure, they would be able to fully use the advantages of a market economy and become co-owners of private enterprises.
4. PROBLEMS AND LIMITATIONS OF STATE INTERVENTION.
Obviously, the modern market system is unthinkable without state intervention. However, there is a line beyond which deformations of market processes occur, production efficiency falls. Then, sooner or later, the question arises of the denationalization of the economy, ridding it of excessive state activity. There are important limits to regulation. For example, any actions of the state that destroy the market mechanism (total directive planning, all-encompassing administrative control over prices, etc.) are unacceptable. This does not mean that the state absolves itself of responsibility for the uncontrolled rise in prices 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, scope and other parameters, and acting in the form of national targeted programs. It should also be noted that the market is largely a self-adjusting system, and therefore it should be influenced only by indirect, economic methods. However, in some cases, the use of administrative methods is not only acceptable, but necessary. One cannot rely only on economic or only on administrative measures. On the one hand, any economic regulator carries elements of administration. For example, money circulation will be influenced by such a well-known economic method as the interest rate on loans. central bank not before an administrative decision has been 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, say, to direct price control, the state creates a special economic regime for producers, forces them to revise production programs, look for new sources of investment financing, etc.
Among the methods of state regulation, there are no completely unsuitable and absolutely ineffective. Everyone is needed, and the only question is to determine for each those situations where its use is most appropriate. Economic losses begin when the authorities go beyond the bounds of reason, giving excessive preference to either economic or administrative methods.
We must not forget that the economic regulators themselves should be used with extreme caution, without weakening or replacing market incentives. If the state ignores this requirement, launches regulators without thinking about how their action will affect the market mechanism, the latter begins to falter. After all, monetary or tax policy in terms of the strength 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, bringing a positive effect in one area of the economy, will certainly have negative consequences in others. Nothing can be changed here. The state using economic instruments of regulation 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 loan. And if interest rates rise, it becomes more and more difficult to finance investments, and economic development begins to slow down. This is how the situation is developing in Russia.
Deregulation and privatization
State intervention in the economy requires quite large expenditures. They include both direct costs (preparation of legislative acts and control over their execution) 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, for the entry of new competitors into the industry, since this requires the permission of the relevant commission.
According to American experts, the state impact on economic life leads to a drop in growth rates by 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 deregulation of the economy and privatization has become more acute. Deregulation involves the removal of legislative acts that hinder the entry of potential competitors into the market, set 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 come down and passenger service has improved. The deregulation of freight, air and rail transport brought benefits to the American society, estimated at $3,963 billion, $15 billion, respectively. and 915 billion dollars. per year (Economic Report of the President, Wash., 1989. P. 188).
Privatization is the sale of state-owned enterprises to individuals or organizations aimed at increasing economic rationality. It is caused by the fact that state-owned enterprises are unprofitable and inefficient. Western economists emphasize that the public sector does not provide such a powerful incentive to reduce costs and make powerful profits, as does private enterprise. For an entrepreneur, one of two things: profit or loss. If a private enterprise suffers losses for a long time, then it is closed. A state-owned enterprise is assisted, so it may not seek to increase its profitability.
This once again proves that state intervention is needed only where it is vital. In all other cases, the market will more effectively solve the set economic tasks.
State regulation in agriculture
In the modern Western economy, 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 play of supply and demand, turns out to be practically inapplicable. True, state intervention is far from a panacea. For example, in Western Europe, governments traditionally pay 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, due to high labor productivity, the 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 technological 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 markets for agricultural products;
D) guaranteed supply of the domestic market;
E) concern for the supply of agricultural products to consumers at "reasonable prices". (V. Varga "The role of the state in the market economy" MEiMO, 1992, N 11, p. 139.)
The state establishes and annually reviews the 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 the EU countries, food prices are noticeably higher than world market prices. Expenses in connection with the implementation of the agrarian policy shall be borne by the state budget.
The functioning of this mechanism can be illustrated by the example of the grain market. The starting point is the approximate price recommended by the state. It somewhat exceeds the market price, which not only guarantees the income of farmers, but also creates incentives to expand production. As a result, supply exceeds demand. When the market price drops to a certain level, the grain offered by the farmers is bought up by the state at the so-called "intervention price" in unlimited quantities.
Thus, although each producer must bear the marketing risk himself, in practice 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 an import duty is imposed on imports, equating the price of the product with the domestic price. When exporting, the state pays the 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 stocks of food have been accumulated, on the other hand, the discontent of the peasants, who believe that their living wage is not provided. In this situation, large agro-industrial enterprises receive decent incomes, while small producers barely make ends meet.
Thus, agriculture remains a weak point of state regulation. However, apparently, the state of affairs in agriculture will remain unchanged.
CONCLUSION.
The study of this topic provides abundant food for thought. Very often, the state is the root cause of changes in the economic behavior of entrepreneurs. Decisions made by the government determine decisions made (or not taken) at the micro level. Government policy achieves its goal only when it encourages and does not dictate. 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 more accessible to entrepreneurs that sector of the economy, which is the highest priority for it.
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.
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, provides for the needs of society in public goods, provides social protection for low-income sections of the population, and solves issues of national defense. On the other hand, state intervention can, in some cases, noticeably weaken the market mechanism and cause significant harm to the country's economy, as was the case in France in the late 70s and early 80s. Due to too active state intervention, an outflow of capital began from the country, and the rate of economic growth fell markedly. In this case, privatization and deregulation are necessary, which was done in 1986.
8. K. McConnell, S. Brew "Economics", Tallinn, 1993.
9. V. Maksimova, A. Shishov "Market economy. Textbook", Moscow, SOMINTEK, 1992.
