13.3. The economic role of the state
The modern economically developed state performs the most important functions of the regulator of economic processes. Competitive mechanisms that ensure the operation of the laws of supply and demand, no matter how perfect they are, all the most complex market institutions, etc., can never replace the government levers of state regulation in modern conditions of world development. All other judgments are a chimera. It can only be about the degree of state economic impact, its scale - whether a particular state intervention is reasonable and expedient, contributing to the development of the economy and market forces proper, or whether it acquires autonomous power and inertia, seeks to encroach on the business community, and acts depressingly on the competitive environment. Let's repeat: no modern state , further the most prosperous , can not do without reasonable and expedient government intervention in area of the economy. At present, we can talk about a model of public-government regulation , but not about strengthening the private elements in the development of the economy.
Ready to make your order?Get your great paper now
In this sense, the US has a unique and instructive experience: there has never been a mass nationalization , nor massive denationalization (privatization ) , except for the periods of the First and Second World Wars, when the state military-industrial enterprises were first built and then taken and implemented. Capitalism here developed with a minimum of state participation, which was mainly associated with a huge and expensive railway construction in the XIX-XX centuries. Colonial, and after independence - the federal authorities provided targeted assistance to European settlers mainly in the colonization of new lands, the creation of infrastructure, the introduction of a judicial system based on a high level of individual freedom and non-interference in the economic life of people. The state from the earliest stages of its existence financed education, health care, took care of the elderly and minors, created conditions for entrepreneurship with respect to any citizen wishing and able to work in this area.
Note that the ability to work has always been the main criterion in the process of investing the land of an American farmer. There were no bureaucratic obstacles, but the one who wanted to farm was to personally present several documents: a doctor's certificate of health, a certificate of education, a recommendation of the local farming community. This order remains to this day due to its full adequacy to the conditions and interests of society (a similar practice exists in Canada).
Specificity of the American development model was formed in many respects in the Great Depression of 1929-1933. In this situation, the main provisions of Keynesian regulation were applied. At the same time, the state's economic activity has sharply increased in three directions. The first - unprecedented scale of state construction in the whole country, which sharply activated the regional activity of the states. These are, first of all, infrastructure facilities: strategic roads, gas and pipeline, power stations, construction of public buildings, etc. The second - sharp strengthening of the state's financial and credit function, the transformation of the tax system into a powerful channel for redistributing national wealth in favor of low-income social strata of society.
The role of the state in the US economy is still great today, and it has not diminished since the Great Depression of the 1930s. One can only talk about the size of the public sector of the economy, which - if we exclude the periods of the First and Second World Wars and the Great Depression - has never been particularly large. State property in the US (federal and state) is mainly historically concentrated in the sphere of land reserves and forestry. In addition, the system of secondary (indirect) influence of the state on economic processes, including the activities of the most powerful American corporations, is often underestimated.
The example of the United States illustrates the fact that the economic activity of the state is far from always related to the size of the public sector and that other forms of state intervention in the economy may be more effective than direct government control in this area. The influence of the legal regulation of property relations, the production and distribution of goods and services not only through the contract system, but also taxes, the redistribution of national income through the state budget, a differentiated system of taxes, wages, support to farmers, science, education, health care, assistance to low-income segments of the population ie through social policy) are all well-developed forms of indirect regulation that are widely practiced in the modern US. At the same time, the most powerful institutions sometimes can independently implement such political practice, which radically changes the very philosophy and psychology of entrepreneurship. This has happened in the United States since the early 1980s, and quite unnoticed, when the financial authorities embarked on the path of implanting libertarian ideology into the activities of big business, providing him with infinite opportunities for enrichment at any cost and destroying traditional Protestant values in the name of maximizing profits.
Ready to make your order?
Get your great paper now
A specific system for organizing the activities of corporations is a unique phenomenon of economic life in America. It is distributed primarily to the entire military-industrial complex, where disparate large private producers are combined through an interconnected mechanism of government purchases and orders into a single huge and fairly rigid system, managed from a single federal center through a corps of special authorized /i> state and professional staff of managerial specialists.
All this causes the continuous growth of public spending in all areas of the life of the state and society. The share of all government expenditures in GDP is stable at a level of more than 30%. Accordingly, in the sphere of GDP consumption, almost one-third of its GDP is under the direct influence of state institutions, and over 1/5 of the country's GDP passes through the federal government channels.
Price Plan & Our Features
- Free Outline
- Free Formatting
- Free Title page
- Free Reference Page
- Free Revisions
- Free Submission by Chapters
- Free Plagiarism Report
- Free Customer Service
- 1 – page abstract
- VIP Support
- Expedited delivery
- Essay outline
How to ...
We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)