The need for state regulation of the economy. Scale of economic activity. Stabilization of the economy

There are many reasons that explain the need for state regulation of the economy, but not all understand them. The market control mechanism is a potentially effective method for ensuring the coordination and harmonization of various economic entities. The market is quite high, and at the same time, it is constantly responsible for making timely and high-quality economic decisions, as well as for the results of the conducted activities.

The need for state regulation of the economy is explained by the fact that if market prices are formed under the influence of supply and demand, producers will have the opportunity to obtain the most complete information on what exactly needs to be produced and in what time frame. At the same time, market prices dictate the adoption of various decisions in the field of investment policy and many others.

The need for state regulation of the economy also arises because, in the absence of control and predictability of the market, it is simply impossible to achieve any really important long-term tasks, as well as to resolve any serious social and economic issues. If there is insufficient coordination of relations, irrational costs may arise due to the release of unnecessary commodity products, frequent bankruptcy due to the emergence of unforeseen changes in market conditions, solvency and consistency of counterparties and other reasons. The laws of the market in themselves can establish the prospects for the development of society as a whole only spontaneously, with absolutely unpredictable results, and this is their organic nature, which dictates the need for state regulation of the economy.

What is it?

Because the market is imperfect and insolvent, even in developed countries, the state intervenes in the economy quite justifiably. It should be noted that the higher is the level of production opportunities, the higher will be the division of labor among all operating enterprises, and the higher is the competition, the stronger the characteristics of the market economy require state regulation.

Such control is the use of a certain set of measures aimed at the centralized impact of the state itself, as well as its regional and federal bodies on the main elements of the market, that is, the terms of implementation, supply and demand, market infrastructure, product quality, competition, and many others. In general, it is customary to single out the three most large-scale functions of the state: stability, justice and efficiency.

Efficiency

Features of a market economy led to the fact that the state using different economic instruments should create an economic environment that will ensure the most efficient operation of production. In particular, special attention is paid to antimonopoly activities of the state, intensification of the competitive environment in the market, as well as providing the most favorable conditions for the operation of market mechanisms.

Justice

For the modern market, a fair environment consists in the fact that high-income organizations have those organizations that provide price and pricing, and who have succeeded in competing in the market for services and goods, capital and labor, and at the same time, low profits for those who In this area failed. An exclusively market distribution is not at all a guarantee of obtaining a subsistence minimum, and for this reason the state should redistribute the revenues received through various taxes, and also provide full-fledged support to the elderly, disabled and other needy people. In other words, the government should take care of the employment of all citizens, guarantee the minimum possible level of consumption through the definition of the minimum wage.

Stability

The state maintains economic stability, in which price and pricing are in extremely calm conditions, and a cyclical form of development is smoothed out. It is also worth noting that it implements antimonopoly policy.

The state should solve those functions that can not be carried out in principle by the market independently. Thus, the regulation of natural monopolies and other spheres makes it possible to supplement and adjust a purely market mechanism.

Different countries use the most diverse technologies of control over the economy, which are selected at the expense of the experience acquired by history. It can be control over the cost, the tax system, expert assessments, limit limits, the introduction of long-term standards and a number of other measures. Due to this, the regulation of natural monopolies and other organizations ensures active influence on the market, and also allows to regulate the relations between consumers and producers. It should be noted that the methods used must be continuously updated and modernized, adapting to the new conditions and tasks of developing the economic structure, and at the same time not hampering enterprise and initiative. Thus, it is possible to achieve flexible use of market and planned principles, based not on their opposition, but on the most effective combination.

Basic concepts

Instruments of state regulation of the economy allow him to influence the activities of various economic agents, as well as market conditions in order to achieve the most optimal working conditions for various mechanisms.

Any negative aspects that are present in a modern market economy can fully explain the reasons why the role of the state in it is constantly increasing. It is precisely the prevention of any negative consequences of the work of market regulators or their smoothing that represents the main task that the economic activity of the state apparatus sets itself.

Functions

Given all of the above, it is possible to identify several of the most important functions for which the instruments of state regulation of the economy are used:

• Creating a legal framework for the normal operation of private entrepreneurs;
• Redistribution of profits through the use of a progressive taxation system, as well as transfer payments;
• Making adjustments to the production structure to change the allocation of resources;
• Financing of basic sciences and ensuring environmental protection;
• Control, as well as adjustment of the level of employment, economic growth rates and the cost of various products;
• Financing of production capacities, as well as the direct production of certain public goods or services;
• Ensuring the protection of competition.

On the last it is worth noting that it is about the work of the antimonopoly structures, because any form of state regulation of the economy is aimed at excluding the possibility of monopoly. The dominance of certain companies in their field ultimately has a very negative impact on society as a whole, so maintaining a competitive environment is one of the most promising functions of any state.

It should be noted that there are two main forms of state regulation of the economy:

• Through the public sector;
• Due to the impact on the work of the private sector when using various economic instruments.

How is it provided?

State regulation in the conditions of modern market economy provides for the use of a number of executive, legislative and supervisory measures that are carried out by state authorized institutions or various public organizations in order to stabilize and further adapt the existing socio-economic system to constantly changing conditions.

In this case, the objects of impact are determined by the activity associated with the regulation of three interrelated parts of the production process: the regulation of production, resources and finance.

By the levels of the regional hierarchy, the goals of state regulation of the economy are fulfilled in two directions: regional and federal levels.

Basic principles

The strategy for ensuring such control is based on the following basic principles:

• Under equal conditions, the market form of organization of the economy should always be preferred. In practice, this suggests that the state should finance only socially significant industries that are unattractive for individuals with individual business due to their low profitability.
• State entrepreneurship in no way should compete with private business, but, on the contrary, only contribute to its development, since this is contradicted by the goals of state regulation of the economy. If this principle is ignored, state enterprises eventually start to dominate private,
• The credit, financial and tax policies of state regulation of the economy should be aimed at ensuring social stability and economic growth.
• The state can intervene in market processes more effectively if it has a market form.
• The government strengthens regulation in order to ensure control of general economic crises, as well as various processes in the field of economic relations with other countries.

Objectives and methods

The development of state regulation of the economy is carried out for the following purposes:

• Minimizing the inevitable negative impact of various market processes.
• Formation of legal, social and financial prerequisites for the effective operation of a market economy;
• Providing social protection for those groups of market society that are most vulnerable in specific economic situations.

At the same time, the methods are divided into direct and indirect methods.

Direct methods that use the system of state regulation of the economy are based on various administrative and legal methods of influencing the work of various business entities.

The indirect ones differ in that they do not provide for any restriction of freedom of economic choice, but instead, on the contrary, provide additional motivation for making market decisions. The main area of their use is the entire economic environment. Such mechanisms of state regulation of the economy provide for the use of the opportunities and means available to the country's monetary and financial systems.

It should be noted that these methods are interrelated.

Instruments

If we talk about the tools that provide state regulation of the economy, then we can identify a few basic:

• Administrative and legal;
• Monetary system;
• financial system;
• State orders;
• State property.

It is also worth noting that, in addition to the above tools to ensure state control of the economy, which mainly have a purely intraeconomic orientation, there is also a whole arsenal of funds that provide for foreign economic regulation. Practically all the levers that provide for the impact on the reproduction procedure within a certain country also have a significant impact on foreign economic relations. Thus, their use provides for a change in the discount rate and taxation, the introduction of new subsidies and incentives for investment in fixed assets and many other measures.

Thus, the state ensures regulation of the economy in order to achieve an optimal market environment.