Market economy and its advantages
The market economy is an economic system based on voluntary cooperation individuals, on direct links between self-producers (sellers) and consumers through free sale of goods. Such a natural exchange "gives people what they want," Friedman emphasizes, and not what they should want on the understanding of some group (46-16). The most important features of a free economy can be reduced to the following six points (Figure 4.27).
Fig. 4.27. Characteristics of a market economy
So, (1) the socio-economic basis of the market economy is private property on land and other means production. It is on its basis that the main actors in the economy are individual, partner, joint-stock and mixed (private) enterprises.
(2) The same private property is the material basis of free enterprise, in which everyone can do any legitimate entrepreneurial activity, he himself decides what, how, for whom and how much to produce, and he himself "kits his happiness". At the same time, every entrepreneur is not only free, but also personally financially responsible for the results of his economic activity: there is no sale of products - he suffers losses, or even goes bankrupt; caused damage to partners, consumers, society or the environment - pays fines, penalties, compensation.
Let's recall, for example, the recent multimillion payments of American tobacco companies to victims of smoking. Firms paid for not adequately warning consumers about the mortal danger of their products, about the high likelihood of smokers suffering from diseases such as lung cancer, stomach, blockage of leg vessels, gangrene, etc.
(3) Freedom of choice consumers, entrepreneurs and employees of their economic partners and purchased goods and services. And due to the wide variety of products, the decisive word belongs to the consumer. It is his free choice in the final analysis that determines what and how much the economy should produce. In Friedman's figurative expression, "anyone can vote for the color of his tie" (47-17): just take out your wallet and pay for your purchase.
(4) Personal benefit of each of the participants in economic relations. It is the best stimulator of human initiative, ingenuity, activity. In addition, in pursuit of personal gain, a person often involuntarily "works" on the interests of others. So, manufacturers in the pursuit of profit better meet the needs of consumers. The desire of workers to a high salary is won by the manufacturers: labor productivity is increasing.
Business is not based on philanthropy or friendship, but on mutual benefit of its participants. Therefore, self-interest in business - normal blow. Let conscience torment the bureaucratic official or swindler [ in whom the conscience is unclean ", we read in Pushkin (32-IV, 202)]. A honest and decent businessman should not be ashamed of his natural desire for personal gain. "It's not from the benevolence of the butcher, brewer or baker that we expect to get our lunch," writes Adam Smith, "but from compliance with their own interests." We are not referring to humanity, but to their egoism and never tell them about our needs, but only about their benefits. " (1-137).
(5) Self-regulation of the economy under the influence of market factors: freely developing prices, free game of supply and demand, competition. This mechanism is a sensitive nervous system self-adjusting economy. That's why "there is nothing higher and smarter than the market", as people like to repeat on Wall Street.
And in fact, if, say, the demand for goods will rise, then its price will increase. This will make the production of goods more profitable, and its manufacturers will increase output. And the same market will certainly punish for unjustified interference in its regulatory mechanism. For example, if the state, taking care of the poor, in an orderly order will underestimate the price of a certain commodity, the latter will immediately disappear from the shelves, and its sale will have to be normalized.
(6) The minimum of dirigism , i.e. control and management of the economy by the state. The less the state intervenes in the economy, the less interference with market self-regulation, the less public sector with its very likely loss, less bureaucracy and abuse of officials, corruption and tax evasion (they are low), less paternalism, and therefore less passivity and dependency of people, more incentives for creative search, innovation and vigorous work.
In this connection, the reflections of Yegor Gaidar, who believes that the level of crime in the society depends on the correlation of state and business forces in the economy depends on it. "Focus" in that the weakening of state positions makes the main figure in the country a businessman, and the strengthening of statehood puts at the center of the whole official. The last one is always potentially more criminogenic than a businessman. " Why? "A businessman can be enriched honestly, if only they do not interfere. An official can only enrich himself with dishonesty (13-209).
The main advantages of the market system is that it stimulates high enterprise, labor and fruitful management; economically rejects inefficient and/or unnecessary production of society; ensures the most equitable distribution of income between participants in social production - on the final results of their activities; gives more rights and choices to consumers; finally, the market system does not require a large administrative apparatus.
The efficiency of the market confirms the historical experience of many countries, but the example of Lithuania and Finland, different economic systems. In the late 1920s, the first even outpaced the second in a number of positions. After the forcible annexation of Lithuania to the USSR (1940), she had to adopt a Soviet model with tightly screwed centralization. Free Finland continued its market path. And here is the result: at the time of the collapse of the Soviet empire (1991), Lithuania was simply a beggar on the bright background of Finnish prosperity.
Even more convincing is the experience of those countries where different economic systems were divided into one and the same people: German, Chinese, Korean. Where the command system and socialism dominated the GDR, the PRC and North Korea, there was an inefficiency of the economy, a low prestige of diligent and creative work, undemocratic, unfree. And vice versa, the FRG, Hong Kong and Taiwan, South Korea have progressed more and more economically and democratically. Thus, the boundary between prosperity and poverty of countries goes along the line dividing the free market and centralization, capitalism and socialism.
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