The main goals and priorities of social reforms in the Russian Federation
Literature
Essence, content and principles of social policy
State policy covers not only the most fundamental directions of development of society, but also specific tasks facing individual spheres of public life. In accordance with this, state policies are distinguished: domestic and foreign, economic and social, policy on the development of the political system of society and the state, national and cultural policy, environmental and defense. They often resort to a more detailed division, considering especially, for example, agricultural, technical, demographic, personnel policies, etc. Since all areas and aspects of social life are interconnected, all these areas of political activity of the state closely interact. Due to the frequent interweaving and “interpenetration”, their delimitation is often quite arbitrary. However, among them there is a direction that is most closely related to the entire complex of human needs and interests. This is a policy addressed to the social sphere - social policy.
Social politics - this 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 the social sphere. The objects of social policy are: the position of classes and social groups, nations and nationalities, the individual family, the position of a person in society and all aspects of national 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 guarantees of the population, employment problems, meeting the material and spiritual needs of people, improving national relations, etc. The main goal of social policy is to increase the level and quality of life of Russian citizens on the basis of stimulating the labor and economic activity of the population, providing every able-bodied person with conditions that allow them to ensure the well-being of their family through their work and enterprise. At the same time, the state fully retains its social obligations to pensioners, disabled people, large families, and disabled citizens. The social policy pursued to date in our country does not meet the requirements of its target setting: there are no clear criteria for social guidelines, a mechanism for implementing social policy has not been developed and, as a consequence, the effectiveness of its implementation is extremely low. The assertion that the social development of society, increasing the people's well-being is the main goal of social production and the basis of state policy, for many years was only a theoretical postulate, largely divorced from real life. This can be confirmed by the low standard of living of the population compared even to developing countries. The social situation continues to remain tense and increasingly complicated. Unemployment is increasing and its hidden forms are developing (3-4-day employment, six-month vacations, reduced shifts, etc.). According to some expert estimates, real unemployment is more than 10-12 million people. Moreover, we are talking about unemployment among the most highly professional labor force who are far from elderly. Hence - a sharp decline in material well-being, apathy, disbelief, stress, and an increase in crime. The intellectual part of society, military personnel, women, children and old people are in a very difficult situation. Morbidity and mortality are increasing, the birth rate is falling. The level of real income of the population in monetary terms is currently 40% lower than in 1991. Mass poverty has arisen, the number of citizens with incomes below the subsistence level is about 25% of the Russian population. Income differentiation has increased, and the illegal and unearned basis of property and social stratification has become sharply visible.
The solution is to improve the country's economy and revive the conditions for social activity, which make it possible to solve these and other pressing problems of the life of the population.
Social justice, which means the measure of equality (or inequality) in people’s living conditions, determined by the level of material and spiritual development of society. Social justice is also real democracy and equality of all citizens before the law, actual equality of nations, respect for the individual and the creation of conditions for its development.
Social guarantees, which mean the socially guaranteed right to security of work, access to education, culture, medical care and housing, care for the elderly, motherhood and childhood.
Increasing the material and cultural standard of living of all members of society, improving working and living conditions, protecting the environment.
Social rehabilitation, which means the restoration of violated social justice. The word “rehabilitation” itself means “restoration,” the return of what was lost. Therefore, it is customary to talk about the restoration of health, rights, and the return of a good name. The problem of social rehabilitation of innocent victims (victims of war, repression, disasters, natural disasters, accidents, etc.) has become especially acute in our time. Social charity is closely related to social rehabilitation.
Development of social activity of all members of society, disclosure, enrichment and use of all creative abilities of a person, combination of consumption of material goods with spiritual life. Science, new technology, economic growth will never replace spirituality, although the latter, for example, cannot be realized without the former.
More complete consideration of the specifics of life and activities of such population groups as youth, women, and the elderly in order to satisfy their needs and interests to the maximum possible extent.
And, finally, the cohesion of all classes and social groups that make up society: the improvement of national relations, the flourishing of nations and nationalities, the strengthening of their comprehensive cooperation in the field of economics, culture, art, etc.
Priority directions of state social policy
The most important priorities of the state’s social policy in modern conditions are: the creation of optimal social infrastructure and its development; problems of environmental protection and protection; society's income distribution policy; socio-demographic policy; problems of employment and social protection of the population.
In solving socio-economic problems, the social sphere occupies a decisive position. Without an extensive system of the social sphere and its normal development, it is impossible to achieve successful implementation of social policy. Let us remember that the economy is the life support system for humans and society as a whole. There is also a narrower area of economics directly related to social phenomena, called the social sphere of economics.
The social sphere is an area of life of human society in which social activities are realized primarily by the state, as well as public and religious organizations, charitable and public funds in the distribution of material, spiritual benefits and services. In a word, everything related to human well-being belongs to the social area of the economy. All types of social security are directly included in the social economy, i.e. monetary support, material assistance provided to individual, most often disabled, layers and categories that do not have their own income and sources of subsistence, or have them to a limited, insufficient extent. The most common type of social security is pension provision. In Russia there are over 38 million pensioners with The country's population is 147.5 million people. Most of them are pensioners by age: women - 55 years old, men - 60 years old. For certain categories of the population, the retirement age is even lower.
Each pensioner is guaranteed a pension payment not lower than the level established by law - the minimum pension, and higher pensions are paid depending on length of service and salary level. In addition to pensions, various benefits and payments are issued from state and local budgets. They can be permanent, long-term or temporary; it is possible to provide one-time, social assistance.
All sectors of the economy have one way or another relation to the social sphere, serve and satisfy not only material needs, but also the spiritual and social needs of people. However, directly related to the sectors of the social profile are:
Housing and communal services. It keeps buildings, elevators, water supply, heat supply, energy supply, sewerage, etc. in working order. Everything that makes up the housing and communal infrastructure.
Household services for the population. Repair shops, laundries, hairdressers and baths, rental shops, taxis, pawn shops, information and funeral services and much more.
Protection, restoration and cleaning of the environment. Services engaged in this activity must provide people with conditions for maintaining a healthy life and normal rest.
The central place among the sectors of the social sphere is occupied by: culture, education, healthcare. These industries are designed to satisfy the most sensitive and subtle needs and tastes of people. Their social significance is exceptionally great. By the way, physical culture and sports are closely related to the healthcare sectors to the extent that they solve the problems of promoting health and promoting a healthy lifestyle.
As already noted, there is also a branch of social security for the population.
Among the priorities of social policy, concern for the protection and restoration of the environment occupies a special place. The viability and quality of life of people is directly dependent on the state of the environment and the current environmental situation. After all, how many seas, lakes, rivers, forests of the earth have been destroyed by man. It should be noted that ecology and life are interconnected: man, striving for a better life, has so deeply transformed and ruthlessly exploited nature that life is becoming worse, more dangerous and shorter. There is currently a demographic crisis going on: more people are dying in our country than are being born. The mortality rate is more than twice the birth rate. At the current mortality rate, the country's population by //2005, i.e. in 10 years, it may decrease from 148.2 million to 138 million people.
Such data are presented in studies by the Institute of Socio-Economic Problems of Population of the Russian Academy of Sciences.
The social task is the proportionality of what we take from nature and what we give to it, how we protect, protect and restore it for the sake of the life of present and future generations. Moreover, the consequences of the neglectful attitude of enterprises and people towards nature and the environment do not appear immediately. Therefore, awareness of the importance of the environment should be manifested in a constant increase in funds allocated for environmental protection.
Let's move on to consider the problem of distribution of income of society.
As noted earlier, fair distribution of income occupies a special place in state regulation of the economy. This most important socio-economic problem is usually considered from the following angles:
Firstly, the distribution of the total income received between production participants (meaning the personal factor of production). This is the so-called functional distribution. It indicates what share of income is allocated to the corresponding street factor of production. For example, the functional distribution of ND in the USA (1990) looked like this. In total, approximately 4 trillion 400 billion dollars, including: wages (including additional payments and income of small and medium-sized entrepreneurs) - 3 trillion 600 billion dollars; interest income - $465 billion; corporate profits $300 billion; rental income - $7 billion
Such distribution among subjects - direct participants in the creation of ND - is also called primary distribution. It is no coincidence that these incomes are called basic.
Secondly, in the process of implementation, ND is repeatedly redistributed both among its creators and among persons engaged in unproductive labor. Income resulting from redistribution is called derivatives. The main instrument for redistributing income tax is the state budget. Tax income is also redistributed through the service sector.
Lawyers, lawyers, artists, clergy and other non-production workers receive their income for the services they provide to the population. Redistribution of ND occurs not only within the country, but also between states.
Thirdly, statistics highlight the distribution of income according to its value. It characterizes the distribution of income generated in the country between families or individuals. Our statistics, for example, show the structure of income and expenses of the family of a worker and office worker, the family of an industrial worker and the family of a collective farmer. When drawing up a consumer budget, the average family consists of four people: a working husband and wife, as well as two children: a boy - 16 years old and a girl - 7 years old.
In recent years, even some developed countries have seen widening inequality in income distribution. There is no need to talk about Russia.
Closely related to the problem of inequality is the question of poverty. Is it possible to define poverty? Obviously. It is possible to identify those boundaries of family income beyond which population reproduction is not ensured. This level should be at least the minimum level of material security, or the subsistence level (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 the necessary objective needs of a person and the cost of living for a certain period. Thus, in 1990, the poverty line was estimated for a family of one person at $7,740 per year, for a family of two - $10,426, for a family of three - $13,078, and for a family of four - $15,730.
Socio-demographic policy. The central place in demography, as is known, is occupied by population reproduction, which occurs due to the natural change of generations, i.e. through fertility and mortality. True, the population of individual regions changes due to its migration. Outside of Russia in other former republics, i.e. In the CIS countries, there are over 25 million Russians and about 4 million citizens of other nationalities. By the beginning of 1995, there were about 670 thousand refugees in Russia. Therefore, the priority directions of migration policy are:
protection of the rights and interests of citizens of the Russian Federation living in the republic and abroad;
regulating the entry and exit of migrants, providing assistance to refugees and internally displaced persons;
creation of legal and humane conditions for the reception and accommodation of refugee families;
developing an understanding among the population of forced migration to Russia.
The main principle in working with forced migrants is the development of initiative and independence in their own arrangement in a new place of residence, attracting their funds received as compensation for abandoned housing and real estate, providing them with preferential loans, as well as financial resources and material resources in order to provide assistance.
The main emphasis in demographic policy should be placed on ensuring healthy offspring, increasing active life expectancy, maintaining health and other qualitative characteristics of population development.
Market conditions make the priority tasks of socio-demographic policy the strengthening of the economic independence of families with children: stimulating the growth of labor income, rather than increasing benefits and compensation payments. The policy to reduce mortality is to prevent child and maternal mortality, reduce the mortality rate of the male population of working age and the gap in life expectancy between men and women, and equalize the quality of medical care for residents of urban and rural areas. If demographic problems are not prioritized, then a threat is created to the gene pool of the nation.
Social protection, guarantee and support of the population
Advancement towards the market is impossible without the creation of a reliable system of social protection of the population, capable of ensuring the maximum possible neutralization of negative phenomena in the economy. That is, a mechanism must be created to protect the population from such social risk factors as unemployment and inflation.
Social protection is a system of measures aimed at creating conditions that ensure the economic and moral well-being of vulnerable, unprotected segments of the population, as well as providing them with additional rights and benefits:
on taxation and payment of pensions and benefits;
on the construction and maintenance of housing, as well as its receipt and acquisition;
for public utilities and trade services;
on medical care, sanatorium-resort treatment, provision of medicines;
on provision of transport means and payment of travel;
on employment, training, retraining and working conditions;
on the use of services of communication institutions and sports and recreational institutions;
for receiving social services, social and legal assistance.
In a broad sense, social protection is that everyone has the right to a standard of living, including food, clothing, housing, medical care and necessary social services, as is necessary for the health and well-being of himself and his family, and the right to security in the event of unemployment, illness, disability, widowhood, old age or other loss of livelihood due to circumstances beyond his control (Article 25 of the Declaration of Human Rights, adopted on December 10, 1948 at the UN General Assembly).
Unfortunately, the current system of social protection and social guarantees does not correspond to the basic principles of a market economy, does not have sufficient flexibility and needs a radical transformation.
On what basic principles should the formation of a new system of social protection take place?
1. A differentiated approach to various layers and groups of the population, depending on their social status, age, ability to work and degree of economic independence.
For the disabled (elderly, children, disabled people), the main emphasis should be on maintaining their well-being, ensuring the level of consumption of the most important material and socio-cultural goods, creating reliable guarantees, the amount of individual income, etc.
As for the able-bodied, for them state guarantees in the field of living standards should be kept to a minimum. The principle of earning money should apply here, including most benefits that were previously provided free of charge.
2. The social protection mechanism should be formed not on the basis of state charity, but as a set of legally established economic, legal and social guarantees.
The social protection system should not be built on the basis of the episodic adoption of isolated one-time decisions to improve the financial situation of certain groups of the population that find themselves in a difficult situation. In the meantime, we are not dealing with a complex system, but with a kind of “ambulance” for patching up the most noticeable social holes. If such a practice more or less corresponded to the needs of an administrative-command economy, then in market conditions it has no prospects.
3. The social protection system must be integrated and operate at all levels: federal, republican, regional, regional, even at the level of an enterprise (firm), joint-stock company with a clear definition of the rights, responsibilities and functions of each of them.
The most appropriate way is to create a multi-level system in which the guarantees established at a higher level would be supplemented and developed at lower levels. Thus, at the federal level, it is necessary to maintain the establishment of a minimum level of guarantees for the entire population of the country, regardless of place of residence.
Of course, there are much more principles (requirements) for the ongoing policy of social protection of the population. For example, the federal law “On the Fundamentals of Social Services for the Population in the Russian Federation,” adopted by the State Duma on November 15, 1995, emphasizes such principles as targeting, accessibility, differentiation, voluntariness, humanity, confidentiality, and preventive orientation.
The system of social protection (security) of the population exists in unity and complexity with the system of social guarantees.
Social guarantees of the state are the basis, the basis for the implementation of the system of social protection of the population.
Every person, as a member of society, has the right to social security and to the implementation of the necessary conditions for maintaining his dignity and for the free full development of his personality.
Every person has the right to work, to free choice of work, to fair and favorable working conditions and protection from unemployment. Every person, without any discrimination, has the right to equal pay for equal work (Articles 22 and 23 of the Declaration of Human Rights).
In the most general form, the state’s social guarantees are the protection of human rights to free work, ensuring the personal safety of citizens in society, and the creation of a life support system that meets the living standards formed to date.
The most important elements, for example, life support include:
1) material security and the creation of conditions under which the income of all members of society can be realized;
2) the opportunity to receive education, medical care, etc.;
3) ensuring environmental safety and maintaining the environment at the required level;
4) improving the financial situation of pensioners, reducing the number of low-income families and citizens;
5) expansion of benefits for working women; creating the necessary conditions for raising the younger generation.
It should be noted that the system of guarantees of protection against possible negative consequences of the labor market should be supported by the creation of legal, financial, and organizational conditions for their provision. In general, this system should integrate the following guarantees:
1) full employment or the right to receive a job;
2) availability of professional training and retraining, as well as qualification growth;
3) maintaining a certain level of material security for the period of retraining or temporary unemployment;
4) protection of the basic rights of the employee in the sphere of labor, etc.
The system of social guarantees should be flexible, designed to prevent possible social risk factors, and not to eliminate existing sources of social tension. The resource and financial foundations of the system of social guarantees should be formed not on a residual basis, but from the actual needs of society. Therefore, the system of social guarantees must be built in such a way as to automatically maintain the level of social protection at the proper level. The basis for this will be the creation of an objective, scientifically based base of social guarantees in the form of a system of state social standards: minimum wages and social payments (benefits, pensions, scholarships); rational nutrition standards and family budget; living wage and indexation of personal income, etc.
In the Address of the President of the Russian Federation to the Federal Assembly on March 6, 1997. It is said that the current practice of distributing social assistance only leads to the dispersion of funds. Currently, there are more than 1,000 regulations in force in Russia that provide certain social benefits for 200 categories of the population. And the number of people who can qualify for various payments, benefits and compensation reaches almost 100 million people.
Since complete social protection of the entire population is unrealistic, it is therefore more correct and reasonable to talk about social support for individual layers and groups of the population. Such categories of the population are usually called weakly protected, or more precisely socially vulnerable segments of the population. The socially vulnerable should include those who are deprived of the opportunity to independently, through their own efforts, improve their well-being, maintain the necessary conditions of life and existence. These are, as a rule, large and low-income families, pensioners and disabled people, as well as unemployed people.
In current practice, families with low monetary income per family member are considered socially vulnerable; families who have lost their breadwinner; mothers raising children alone; persons affected by repression and natural disasters. Students can also be classified as a weakly protected category of the population.
All of the above layers and groups of the population need social support from society, the state, the government, large entrepreneurs, public, private and charitable organizations.
During the transition to a market economy, the problem of social protection of the population from rising prices, inflation and unemployment is most acute. In order for rising prices for goods and services not to lead to a catastrophic decline in personal consumption and living standards, income indexation must change. That is, salaries, pensions, scholarships and other types of income and payments should increase as the retail prices of food, non-food goods and services increase.
A few words about social charity as a mass and everyday phenomenon of a democratic society.
For our society, such a function of society is unusual and new. Although the principles of charity have long been embedded in many Christian commandments. The highest meaning and purpose of a person is to make as many other people happy as possible.
Social charity is manifested in the fact that some people (or groups of people) selflessly, following an inner spiritual call, help others: with money, things, services, advice, care, treatment, care and consolation. We must see this as a manifestation of the nobility and dignity of such people.
/>Main goals and priorities of social reforms in the Russian Federation
The current economic situation dictates the need to increase the efficiency of social policy, concentrate efforts on solving more pressing social problems, and develop new mechanisms for implementing social policy that ensure a more rational use of financial and material resources.
It is necessary to reorient social policy towards activating factors that stimulate highly efficient and productive work, and on this basis increasing the personal responsibility of citizens for their material well-being.
The strategic goals of social policy are:
achieving a tangible improvement in the material situation and living conditions of people;
ensuring effective employment of the population, improving the quality and competitiveness of the workforce;
guarantee of the constitutional rights of citizens in the field of labor, social protection of the population, education, health care, culture, housing;
reorientation of social policy towards the family, ensuring rights and social guarantees provided to families, women, children and youth;
normalization and improvement of the demographic situation, reducing the mortality rate of the population, especially children and citizens of working age;
significant improvement of social infrastructure.
To achieve these goals you will need:
restore the role of income from labor as the main source of cash income for the population and the most important incentive for the development of production and increasing the labor activity of workers;
ensure fair distribution of income by improving the system of individual taxation of income and property of citizens, increasing tax rates for individuals with high personal incomes and reducing the tax burden on low-income groups of the population;
stimulate the use of income from labor and entrepreneurial activities, income from property for investing and lending to socially significant programs aimed at creating basic living conditions: improving housing conditions, medical care, education;
to ensure balance in employment policy so that, on the one hand, to prevent mass unemployment, and on the other, not to impede the release of excess labor in connection with the structural restructuring of the economy;
strengthen the targeting of social support for needy citizens based on taking into account the financial situation of families and the applicant principle for assigning benefits;
create adequate living conditions for families, women, youth, and improve living conditions for children;
increase the role of social insurance as the most important mechanism for protecting citizens in the event of loss of earnings in the event of unemployment, illness, and other social and professional risks;
ensure stable financing of social sectors and social programs, guarantee access to medical care, social services, education, culture and recreation for all citizens.
Reforms in the social sphere will be carried out in close connection with the economic transformations outlined in the concept of the medium-term program of the Government of the Russian Federation for 1997-2000 “Structural adjustment and economic growth”. Taking into account the projected indicators of economic development in the coming period, real opportunities will appear for solving the social problems set.
It is envisaged that there will be an annual increase in the gross domestic product and investment in fixed capital, an increase in the volume of industrial and agricultural production, a further reduction in inflation and the budget deficit, a strengthening of the national currency, and an increase in the share of expenditures on final consumption of households in the gross domestic product used.
A set of measures has been outlined aimed at implementing institutional reforms, progressive structural changes in production, reforming the tax system, budget and monetary policy. On this basis, favorable conditions will be created for the development of modern competitive industries and activities, primarily high-tech and knowledge-intensive sectors of the economy, small and medium-sized businesses, changes in the sectoral structure of production and its territorial location, improving the quality of products and production efficiency, increasing labor productivity, reducing production costs ,creating new jobs.
As a result, a reliable economic basis will be created to increase employment and income of the population, expand the tax base and increase the volume of funds allocated for social needs and development of the social sphere.
At the same time, more active use of social factors and planned measures to improve the financial situation of people, increase the monetary income of the population, ensure a rational employment structure, improve the quality and competitiveness of the workforce will create favorable conditions for sustainable economic development, increased production, and growth in effective demand for goods and services.
Based on the projected indicators of socio-economic development of the Russian Federation for the period up to 2000, the intended goals of social policy can be implemented in stages.
At the first stage (1996-1997), in conditions of limited resource capabilities of the economy, it is necessary to implement a set of measures to stabilize the standard of living of the population, gradually reduce poverty, reduce the gap in living standards between different categories of the population, prevent mass unemployment, strengthen the protection of labor and social rights of citizens .
The most important of these measures are:
liquidation and prevention of future arrears in payment of wages, pensions and benefits;
streamlining the current system of benefits and compensation, increasing the validity of their provision;
formation of a system of state minimum social standards;
legislative consolidation of the procedure for determining and using the cost of living indicator, clarifying the methodology for its calculation based on the actual costs of food and non-food products, housing and communal services, transport, household, medical and other services;
preventing the mass release of employees of enterprises located in regions with a critical situation on the labor market.
When carrying out these measures, the main emphasis will be on increasing the efficiency of using funds allocated for social needs, strengthening the targeting of social support, and wider attraction of extra-budgetary financial sources.
It is necessary to determine the procedure for interaction in the field of social policy between federal executive authorities, executive authorities of the constituent entities of the Russian Federation and local governments, federal ministries and departments, public and commercial organizations.
At the second stage (1998-2000), when economic growth begins and material and financial opportunities appear to increase spending on social needs, objective prerequisites will be created for the real growth of cash incomes of the population, eradicating mass poverty, and ensuring an optimal level of employment. At this stage it is planned:
increase the minimum state guarantee of wages and labor pensions to the level of the subsistence level, introduce a new social standard for remuneration - an hourly tariff rate;
introduce mechanisms for tariff regulation of wages in the non-budgetary sector of the economy on the basis of social partnership, revise the Unified tariff schedule for remuneration of public sector workers, while ensuring that the wages of these workers are brought closer to the level of wages in manufacturing sectors;
revise the system of taxation of individual incomes of the population in order to more equitably distribute income and reduce their differentiation;
begin implementing a comprehensive job creation and retention program;
create a full-fledged system for protecting citizens’ labor rights based on the new Labor Code;
initiate large-scale pension reform;
begin reforming the social insurance system, introduce a new mechanism for insurance against industrial accidents and occupational diseases;
improve the procedure for the formation of budget expenditures for social needs based on the introduction of state minimum social standards.
Subsequently, on the basis of stable economic growth and strengthening the orientation of the economy towards more effectively meeting human needs, it is necessary to create strong prerequisites for sustainable social development, the formation of a society open to broad social integration, allowing people to realize their potential to the maximum extent.
This path leads to a free, economically efficient, stable order in society. A legal social state must ensure economic freedom and social justice in a social market economy. Therefore, the concept of a social market economy must reflect a combination of goals - freedom and justice.
A social market economy is built on competition, private initiative, self-interest and social progress. Every member of society has fundamental rights: to well-being and free and comprehensive personal development, to human dignity.
Economic economic freedom includes:
1. Freedom of consumers to buy, at their own discretion, goods and services that are part of the social product (freedom of consumption).
2. Freedom of the owner of the means of production to use labor and money, resources and property, as well as entrepreneurial abilities at his own discretion (freedom of trade, freedom to choose a profession and workplace, freedom to use property).
3. Freedom of entrepreneurs to produce and sell goods at their own discretion (freedom of production and trade).
4. Freedom of every seller and buyer of goods or services to achieve their goals (freedom of competition).
Let us consider, using the example of Germany, how social justice is realized through the main goals of a social market economy. These goals include:
1. Ensuring the highest possible level of well-being.
Means of achievement: economic policy focused on economic growth, improving the level and quality of life of the people; establishing an economically rational order and competition; full employment of the population; economic freedom of business entities; freedom of foreign trade, etc.
2. Ensuring an economically efficient and socially fair monetary system and, in particular, ensuring stability of the general price level.
Means of achievement: existence of an independent Central Bank of Issue; “stability” of the state budget; equalization of the balance of payments and balance in foreign trade.
3. Social security, justice and social progress (family protection, fair distribution of income and property).
Means of achievement: production of the maximum amount of social product; government adjustment of the initial distribution of national income; setting social standards; well-functioning social assistance system, etc.
In a word, a social market economy must be based on freedom of competition, private enterprise and government regulation of the economy.
State policy to ensure full employment
The best guarantee against the risk of unemployment is the state employment policy. The success of the full employment policy in the national economic aspect means the production of a social product in a larger volume, which significantly expands the basis for achieving the effectiveness of the state's social policy. From the point of view of employees, this policy has a positive impact on their current income. This income guarantee has a multiple effect:
it removes the need to provide unemployment benefits, social assistance and other types of assistance;
constant concern for labor income forces you, first of all, to personally take care of your own life benefits, as well as your family members;
economic dependence on the state is reduced.
All this together gives rise to faith in life and hope to realize one’s needs through participation in the economic sphere. Full employment also has a lasting impact on the labor market (labor force) and on employment conditions:
full employment, as a rule, is characterized by a state of general rapid growth in labor income (in labor markets, the supply of most professions and activities is reduced; favorable conditions are created for negotiations with employers with the participation of a trade union, etc.);
full employment increases the interdependence of the labor market (exhaustion of labor reserves in the regional and professional labor market), affects labor demand in other labor markets.
In order to attract labor from other markets, employers must (are forced) to improve working conditions. Local employers, due to the danger of labor outflow, are also forced to further improve working conditions and increase wages.
Literature
2. Law of the Russian Federation “On the fundamentals of social services for the population in the Russian Federation.”
3. Program of social reforms in the Russian Federation for the period 1996-1997.
4. Program of the Government of the Russian Federation “Reforms and development of the Russian economy in 1995-1997”.
5. Social policy and labor market: issues of theory and practice. - M., 1996.
6. Introduction to market economics / Edited by A. Livshits and I. Nikulina. - M., 1994, chapter 13.
7. Fundamentals of a market economy. Ed. V. Kamaeva and B. Domnenko. - M., 1991, ch. 19.
8. Market economy. Textbook. - M.: Somintek, 1992, vol. 1, chapter 14.
9. Textbook on the basics of economic theory. - M., 1994, chapter 16.
10. Market economy. Textbook. - M., 1993, ch. 19.
INTRODUCTION
The problem of government intervention in the economy is fundamental 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 responsibilities 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 main economic question with strict centralization and distribution. However, such a system has actually shown to be ineffective. The market path of development remains. But in a market economy, the state has to constantly adjust the depth of influence. The state does not face such tasks as direct production and distribution of resources, goods and services. But it 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, either increasing or decreasing the degree of intervention. The market system is, first of all, flexibility and dynamism in decision-making both on the part of consumers and on the part of producers. State policy simply does not have the right to lag behind changes in the market system, otherwise it will turn from an effective stabilizer and regulator into a bureaucratic superstructure that slows down the development of the economy.
1. HISTORY OF THE EVOLUTION OF PERSPECTIVES ABOUT THE ROLE OF THE STATE IN THE ECONOMY.
A) Mercantilists.
The history of government regulation dates back to the end of the Middle Ages. At that time, the main economic school was the mercantilist school. She proclaimed active government intervention 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 curbing imports.
B) Classical theory.
The next stage in the development of ideas about the role of the state was the work of A. Smith “An Inquiry into 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 structure” (Varga V. Role states in a market economy. MEiMO N11, 1992, p. 131).
According to 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 ineffectively. In his description of the market economy system, Adam Smith argued that it is the entrepreneur’s desire 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 thing was that basic economic freedoms should be guaranteed for all economic entities, namely freedom to choose the sphere of activity, freedom of competition and freedom of trade.
B) 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" because he views the economy in a state of depression. According to his theory, the state should actively intervene in the economy due to the lack of mechanisms in the free market that would truly ensure the economy’s recovery from the crisis. Keynes believed that the state should influence the market in order to increase demand, since the cause of capitalist crises is overproduction of goods. He offered several tools. This is a flexible monetary policy, a new budgetary and financial policy, etc. A flexible monetary policy allows one to step over one of the most serious barriers - wage inelasticity. This is achieved, Keynes believed, by changing the amount of money in circulation. As the money supply increases, 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 regulatory model are:
High share of national income redistributed through the state budget;
Creation of an extensive zone of state entrepreneurship based on the formation of state and mixed enterprises;
Widespread use of budgetary and financial regulators to stabilize the economic situation, smooth out cyclical fluctuations, maintain high growth rates and high levels of employment.
The model of government regulation proposed by Keynes helped to weaken cyclical fluctuations for more than two post-war decades. However, from about the beginning of the 70s. a discrepancy began to appear between the possibilities of state regulation and objective economic conditions. The Keynesian model could only be sustainable in conditions of high growth rates. High growth rates of national income created the possibility of redistribution without compromising capital accumulation. However, in the 70s, reproduction conditions deteriorated sharply. Phillips' law was refuted, according to which unemployment and inflation cannot grow at the same time. Keynesian ways out of the crisis only unwinded the inflationary spiral. Under the influence of this crisis, a radical restructuring of the state regulation system took place and a new, non-conservative regulatory model emerged.
D) Neoclassical theory.
The theoretical basis of the neoconservative model was the concepts of the neoclassical direction of economic thought. The transformation of the state regulation model consisted of abandoning the influence on reproduction through demand, and instead using indirect measures to influence supply. Proponents of supply-side economics believe it is necessary to recreate the classical mechanism of accumulation and restore freedom of private enterprise. Economic growth is considered as a function of capital accumulation, which is carried out from two sources: from own funds, i.e. capitalization of part of the profit, and from borrowed funds (loans). Therefore, in accordance with this theory, the state must provide conditions for the process of capital accumulation and increasing production productivity.
The main obstacles on this path are high taxes and inflation. High taxes limit the growth of capital investment, and inflation makes credit more expensive and thereby makes it difficult to use borrowed funds for savings. Therefore, the neoconservatives proposed the implementation of anti-inflationary measures based on the recommendations of monetarists and the provision of tax benefits to entrepreneurs.
Reducing tax rates will reduce state budget revenues and increase its deficit, which will complicate the fight against inflation. Therefore, the next step will be to reduce government spending, stop using the budget to maintain demand and implement large-scale social programs. This also includes the policy of privatization of state property.
The next set of measures is the implementation of deregulation policy. This means the elimination of price and wage regulations, liberalization (softening) of antitrust laws, 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 which it itself is either unable to cope with, or this solution is ineffective. The state takes responsibility for creating equal conditions for competition between entrepreneurs, for effective competition, and for limiting the power of monopolies. It also cares about the production of sufficient quantities of public goods and services, since the market mechanism is unable to adequately satisfy the collective needs of people. The participation of the state in economic life is also dictated by the fact that the market does not ensure a socially fair distribution of income. The state should take care of the disabled, the poor, and the elderly. He also belongs to the sphere of fundamental scientific developments. This is necessary because for entrepreneurs it is very risky, extremely expensive and, as a rule, 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 a given community of citizens. It actively participates in the formation of macroeconomic market processes.
The role of the state in a market economy is manifested through the following important functions:
A) creation of a legal basis for making economic decisions. The state develops and adopts laws regulating business activities, determines the rights and responsibilities of citizens;
B) stabilization of the economy. The government uses fiscal and monetary policies to overcome the decline in production, 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 that are not handled by the private sector. It creates conditions for the development of agriculture, communications, transport, determines spending on defense and science, forms programs for the development of education, healthcare, 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.
Antimonopoly activity of the state is one of the most important areas of government intervention. Regulation is developing 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, the state creates public regulatory bodies to control their economic behavior. In most other markets where monopoly has not become a necessity, public control has taken the form of antitrust laws. Next, the features of regulating the activities of natural monopolies will be considered.
A natural monopoly exists when one firm can supply the entire market while enjoying lower unit costs achieved through scale. This is common in public utilities where large-scale operations are necessary to achieve low prices.
To ensure acceptable behavior of such monopolies, two options can be used: state ownership and state regulation.
For natural monopolies, a “fair” income is usually set, that is, a price equal to average gross costs. 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 used in cases where competition would 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 type 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 Act and only clarified some of its points.
That 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 scope of illegal conduct and provided an independent antitrust agency with investigative powers.
A large number of antimonopoly laws and various clarifications 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 manufacturers who do not use illegal methods of competition. If this condition is not met, then entrepreneurs will have significantly reduced incentives to make their enterprise stronger and produce more products.
Thus, the state acts as an arbiter who selects the optimal (and most effective) relationship between monopolies and competitive industries. In different periods of history for different countries, this ratio was different, adjusted to the peculiarities of economic development, and the state must skillfully and effectively use this mechanism.
3. METHODS OF GOVERNMENT INFLUENCE ON THE MARKET
The state influences the market mechanism through its spending, taxation, regulation and public entrepreneurship.
Government spending. They are considered one of the important elements of macroeconomic policy. They influence the distribution of both income and resources. Government expenditure consists of government purchases and transfer payments. Government purchases are, as a rule, the acquisition of public goods (defense costs, construction and maintenance of schools, highways, research 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 government procurement contributes to national income and directly uses resources, in while transfers do not use resources and are not associated with production. Government procurement leads to a redistribution of resources from private to public consumption of goods. They enable citizens to use public goods. Transfer payments have another meaning: they change the structure of 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 the transfers are intended spend this money on other goods, which results in a change in the consumption structure.
Another important instrument of government policy is taxation. Taxes are the main source of budget funds. States with market economies impose different types of taxes. Some of them are visible, such as income taxes, while others are not so obvious, as they are imposed on producers of raw materials and affect households indirectly in the form of higher prices for goods. Taxes cover both households and firms. Significant amounts go to the budget in the form of taxes (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 progressiveness of taxation, 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 employee’s income);
Regressive tax (in percentage terms, the tax levied is lower, the higher the employee’s income);
Progressive tax (in percentage terms, 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 incentive to work, and, consequently, to earn more. As a rule, income tax is based on this principle. However, sales and excise taxes are actually regressive because they are generally passed on to consumers, of whom the same amount takes up a different share of their income.
The state’s task 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, exactly this situation is happening in Russia. The state does not have enough funds, it increases taxes, entrepreneurs increasingly evade paying them, therefore, less and less funds go to the budget. The government is raising taxes again. It turns out to be a vicious circle. I believe that in this situation it is reasonable to lower taxes. This will reduce incentives for non-payment, make honest entrepreneurship more profitable, lead to more government revenue and reduce the level of criminalization of business.
Government regulation. 0designed 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. An example is antitrust laws. Tax and credit forms of regulation involve the use of taxes and credits to influence national output. By changing tax rates and benefits, the government influences the contraction or expansion of production. When credit conditions change, the state influences a decrease or increase in production volume.
The subsidy form of regulation involves the provision of government subsidies or tax breaks to individual 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 be provided in the field of science, education, personnel training, and in solving social programs. There are also special or targeted subsidies, which provide for the expenditure of budget funds according to strictly defined programs. The share of subventions in the GNP of developed countries is 510 percent. By issuing subsidies and reducing tax rates, the state thereby changes the distribution of resources, and subsidized industries are able to reimburse costs that cannot be covered at market prices.
State entrepreneurship. 0is carried out in those areas where economic management is contrary to the nature of private firms or requires huge investments and risk. The main difference from private entrepreneurship is that the primary goal of state entrepreneurship is not to generate income, but to solve socio-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 low-profit enterprises and sectors of the economy that are vital for reproduction. These are, first of all, sectors of economic infrastructure (energy, transport, communications). Problems solved by state entrepreneurship also include providing the population with benefits 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 strengthening on this basis the country’s position in the world economy, carrying out regional construction policies in economically backward areas industrial enterprises, job creation, environmental protection through the introduction of waste-free technologies, construction of treatment facilities, development of fundamental scientific research, production of goods, which is a state monopoly by law.
I believe that public entrepreneurship should develop only in those areas where there is simply no other way out. The fact is that, compared to private ones, 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 the degree of economic independence. The activities of a state-owned enterprise probably contain both market and non-market motives coming from the state. Political motives are changeable, they depend on the government, orders of ministries, etc. Therefore, state-owned enterprises 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 likely 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. Behind them there may be political goals 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 within the framework of government orders). State-owned enterprises have no obligations to shareholders; they are usually not threatened with bankruptcy. All this negatively affects the dynamics of costs and prices, the speed of development of new technologies, the quality of production organization, etc.
Competition in the field of commercial activity is also unacceptable because the private sector is drawn into corruption: through a bribe to an official one can achieve greater results than by reducing costs.
If the economy is saddled with too many state-owned enterprises, their workers find themselves in a difficult situation. They are the first victims of government policies aimed at overcoming emergency situations. Typically, people working in the public sector are the first to feel a wage freeze. Apparently, this is why the wave of privatization that swept through the economies of Western countries in the 80s did not cause widespread protests from the bulk of those employed in the public sector. People hoped that, freed from state pressure, they would be able to fully take advantage of the advantages of a market economy and become co-owners of private enterprises.
4. PROBLEMS AND LIMITATIONS OF GOVERNMENT INTERVENTION.
It is obvious that a modern market system is unthinkable without government intervention. However, there is a line beyond which market processes become deformed and production efficiency decreases. Then, sooner or later, the question arises of denationalizing the economy, ridding it of excessive state activity. There are important limitations to regulation. For example, any government actions that destroy the market mechanism (total directive planning, comprehensive administrative control over prices, etc.) are unacceptable. This does not mean that the state abdicates responsibility for uncontrolled price increases and should abandon planning. The market system does not exclude planning at the level of enterprises, regions and even the national economy; however, in the latter case it is usually “soft”, limited in terms of time, scale and other parameters, and acting in the form of national target programs. It should also be noted that the market is in many ways a self-adjusting system, and therefore it should be influenced only by indirect, economic methods. However, in a number of cases, the use of administrative methods is not only acceptable, but also necessary. You cannot rely only on economic or only administrative measures. On the one hand, any economic regulator carries elements of administration. For example, money circulation will feel the influence of such a well-known economic method as the central bank lending rate no earlier than an administrative decision is made. On the other hand, there is something economic in every administrative regulator in the sense that it indirectly affects the behavior of participants in the economic process. By resorting to, say, direct price control, the state creates a special economic regime for producers, forces them to revise production programs, look for new sources of investment financing, etc.
Among the methods of government regulation, there are no completely unsuitable and absolutely ineffective ones. All are needed, and the only question is to determine for each those situations where its use is most appropriate. Economic losses begin when authorities go beyond the bounds of reason, giving excessive preference to either economic or administrative methods.
We must not forget that economic regulators themselves should be used with extreme caution, without weakening or replacing market incentives. If the state ignores this requirement and launches regulators without thinking about how their action will affect the market mechanism, the latter begins to fail. After all, monetary or tax policy in terms of its impact on the economy is comparable to central planning.
It must be borne in mind that among economic regulators there is not a single ideal one. Any of them, while bringing a positive effect in one area of the economy, will certainly have negative consequences in others. Nothing can be changed here. The state that uses economic regulatory instruments is obliged to control them and stop them in a timely manner. For example, the state seeks to curb inflation by limiting the growth of the money supply. From the point of view of fighting inflation, this measure is effective, but it leads to an increase in the cost of central and bank credit. And if interest rates rise, it becomes increasingly difficult to finance investments, and economic development begins to slow down. This is exactly how the situation is developing in Russia.
Deregulation and privatization
Government intervention in the economy requires quite large expenditures. They include both direct costs (preparation of legislative acts and monitoring their implementation) and indirect costs (on the part of firms that must comply with government instructions and reporting). In addition, it is believed that government regulations reduce the incentive for innovation and the entry of new competitors into the industry, since this requires permission from the relevant commission.
According to American experts, government influence on economic life leads to a decline in growth rates 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 economic deregulation and privatization has become more acute. Deregulation involves the removal of legislation that hinders the entry of potential competitors into the market and sets prices for certain goods and services. For example, in the United States in the 1980s, deregulation affected trucks, rail and air transport. As a result, prices have dropped and passenger service has improved. For American society, deregulation of freight, air and rail transport brought benefits estimated at $3,963 billion and $15 billion, respectively. and 915 billion dollars. per year (Economic Report of the President, Wash., 1989. P. 188).
Privatization, the sale of state-owned enterprises to private individuals or organizations, is aimed at increasing economic efficiency. It is caused by the fact that state-owned enterprises turn out to be unprofitable and ineffective. Western economists emphasize that the public sector does not provide such a powerful incentive to reduce costs and generate powerful profits as private enterprise does. For an entrepreneur, one of two things: profit or loss. If a private enterprise suffers losses for a long time, it closes. A state-owned enterprise is provided with assistance, so it may not strive to increase its profitability.
This once again proves that government intervention is only needed where it is vitally necessary. In all other cases, the market will more effectively solve the assigned economic problems.
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 game of supply and demand, turns out to be practically inapplicable. True, government intervention is far from a panacea. For example, in Western Europe, governments have traditionally paid great attention to the problems of the agricultural market, but neither producers nor consumers are satisfied with the state of affairs in the agricultural sector.
The source of the problems is that in developed countries, 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 technical progress and rationalization of production, the most efficient use of all production factors, especially labor;
B) ensuring employment in the agricultural sector and an appropriate standard of living for the rural population;
C) stabilization of agricultural markets;
D) guaranteed supply of the domestic market;
D) concern for the supply of agricultural products to consumers at “reasonable prices.” (V. Varga “The role of the state in a market economy” MEiMO, 1992, No. 11, p. 139.)
The state sets and annually reviews minimum prices for the most important agricultural products. Thus, producers are protected from a sharp drop in prices. At the same time, the domestic market is protected from cheap imports and excessive price fluctuations through a system of additional import duties. Therefore, in EU countries, food prices are noticeably higher than world market prices. Costs in connection with the implementation of agricultural policy are borne by the state budget.
The functioning of this mechanism can be illustrated using the example of the grain market. The starting point is the estimated price recommended by the state. It is slightly higher than the market price, which not only guarantees the income of rural owners, but also creates incentives to expand production. As a result, supply exceeds demand. When the market price drops to a certain level, the grain offered by farmers is bought by the state at the so-called “intervention price” in unlimited quantities.
Thus, although each producer must bear the marketing risk himself, in reality this rule does not apply to producers of many agricultural products.
There are also mechanisms to protect against cheap imports and encourage exports. This means that upon import, an import duty is established that equates the price of the product to the domestic price. When exporting, the state pays exporters the difference between the domestic price and the world market price.
It should be noted that this policy provoked many problems. On the one hand, huge food reserves have been accumulated, on the other hand, there is discontent among the peasants who believe that their subsistence level is not provided. In this situation, large agro-industrial enterprises receive decent incomes, while small producers struggle to make ends meet.
Thus, agriculture remains a weak point of government regulation. However, it seems that the situation in agriculture will remain unchanged.
CONCLUSION.
Studying this topic provides plenty of food for thought. Very often the state is the root cause of changes in the economic behavior of entrepreneurs. The decisions made (or not made) at the micro level depend on the decisions made by the government. Government policies achieve goals only when they encourage rather than prescribe. When creating favorable conditions for entrepreneurs, their private interest will coincide with the interest of the state, that is, society. Consequently, the state should simply make the sector of the economy that is its highest priority more accessible to entrepreneurs.
It should be noted that the state should not interfere in those areas of the economy where its intervention is not necessary. This is not only unnecessary, but also harmful to the economy.
In general, it is difficult to overestimate the role of the state in the economy. It creates conditions for economic activity, protects entrepreneurs from the threat of monopolies, meets society's needs for public goods, provides social protection for low-income groups of the population, and resolves issues of national defense. On the other hand, government intervention can, in some cases, significantly 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 government intervention, an outflow of capital began from the country, and the rate of economic growth fell noticeably. 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 Economics. Textbook", Moscow, SOMINTEK, 1992.
In a market economy, as is known, each economic entity pursues its own goals: firms strive to maximize profits, households strive to satisfy their needs as much as possible. These goals are contradictory, but can only be achieved from one source - the result of production activity in the form of GDP, and therefore the achievement of specific goals of some subjects encounters the opposite of the goals of other subjects. For example, the opposite of maximizing profits is minimizing wages, which can cause labor conflict, halt production, and reduce rather than increase profits. The opposite of maximizing output, which increases the profit of the company, can be excessive pollution of the environment, worsening the living conditions of people whose protests can lead to the shutdown of the enterprise. It is obvious that each economic entity, in order to achieve its goals, must take into account the goals of other entities. The desire of some economic entities to achieve their goals, by infringing on the interests of other entities, can lead to a deterioration in the general living conditions in society. Although the economic goals of all economic entities are different, they can be achieved without any social upheaval only with a general improvement in living conditions in society.
Based on this, we can say that the ultimate goal of effective economic activity of people in the broadest sense is the creation of a material base for improving the living conditions of every person. And the coordinated activities of all economic entities to ensure favorable living conditions for the population expresses the content social policy. Social policy, therefore, can be carried out: at the micro level - by firms and municipalities, creating favorable working and living conditions for working personnel and residents of the corresponding settlements; at the macro level - regional and federal authorities. The material security of social policy does not develop on its own, automatically, but is based on certain rules and regulations. The coordinating role in such activities of all economic entities is played by the state, which determines the directions and sources of the formation of material security for social policy.
The main directions of social policy are:
– improving the well-being of all members of society;
– improving working and living conditions of people;
– implementation of the principles of social justice in combination with economic efficiency.
The effectiveness of social policy is manifested in the level and quality of life of the population. Under standard of living understand the degree of provision of the population with economic benefits. To quantify the standard of living, indicators such as consumption of basic food products (bread, potatoes, vegetables, fruits, meat, etc.) and personal items (clothing, shoes, hygiene, etc.) per person are used. worker or one resident of the country, or the provision of durable goods (furniture, refrigerators, televisions, etc.) per 100 families.
To assess the real standard of living, it is necessary to have a benchmark or standard against which the actual level of consumption is compared. As such a standard, a “consumer basket” is used, which includes an established set of goods and services. Comparison of the actual level of consumption with the “consumer basket” evaluates the real standard of living. The "consumer basket" used to assess the standard of living can be rational, minimal and physiological. The approximation of the actual level of consumption to the set of goods and services of the corresponding “consumer basket” characterizes the rational, minimum and physiological level of consumption, respectively.
The fullness of a rational “consumer basket” is determined based on the satisfaction of reasonable and scientifically based human needs. The set of goods and services included in it ensures the complete and harmonious physiological and social development of a person, and actual consumption, approaching rational, characterizes rational level of consumption.
The volume of the minimum “consumer basket” is calculated based on the economically possible set of goods and services, the reduction of which is socially unacceptable. Structurally, such a basket takes into account the needs of an unskilled worker and his dependents and includes essential goods and services. The cost of a set of goods and services of the minimum “consumer basket”, calculated at the lowest prices, is used to determine the subsistence level. The cost of living characterizes minimum level of consumption.
Physiological level of consumption is determined by such a set of goods and services below which a person cannot physically exist. The state of poverty of the population is associated with it. Poverty - This is a situation in which the inhabitants of a country do not have the means of subsistence at the minimum level for a given society and at a given time. In other words, poverty is a borderline state between the minimum and physiological levels of consumption. Absolute poverty is defined as the minimum level of cost of living, calculated on the basis of the physiological needs of people for food, housing, clothing, satisfying basic human needs.
The most complete, or comprehensive, effectiveness of social policy is manifested in the quality of people’s lives. Under quality of life understands the degree of provision of the population not only with economic benefits, but also with non-economic benefits, including a fairly wide range of specific needs and interests:
– working and rest conditions;
– social security and social guarantees;
– protection of law and order and respect for individual rights;
– availability of free time and the ability to use it rationally;
– natural and climatic conditions and state of the environment;
– a feeling of stability and comfort in all areas of life.
The main indicators of the quality of life of the population, allowing us to assess its level in the country and compare it with other countries are:
· human development index;
· index of intellectual potential of society;
human capital per capita;
· life expectancy of people.
Human Development Index represents the arithmetic average of three indices: 1) life expectancy; 2) level of education; 3) GDP per capita (at purchasing power parity of the national currency). The Human Development Index has been defined by the UN since 1990. It currently ranges from 0.25 in Ethiopia to 0.96 in Canada. In Russia it is 0.76.
Index of intellectual potential of society reflects the level of education of the population and the state of science in the country. When calculating it, the following are taken into account: 1) the level of education of the adult population; 2) the proportion of students in the total population; 3) share of education expenditures in GDP; 4) the share of people employed in science and scientific services in the total number of employees; 5) share of spending on science in GDP. According to experts, during the market reforms in Russia, the intellectual potential of society decreased from 0.71 in 1989 to 0.37 in 2003.
Human capital per capita reflects the level of spending by the state, firms and citizens on education, healthcare and other sectors of the social sphere per capita. It is quite difficult to estimate its value, but the higher the level of economic development of the country, the greater the level of human capital and its share in the structure of total capital.
The simplest and at the same time general indicator of quality of life is life expectancy of people. The average life expectancy of people in developed countries in 2005 was from 70 to 80 years, and the gap in life expectancy between women and men was from 2 to 6 years. In Russia, the average life expectancy in 2005 was 65.3, including: men - 58.9, women - 72.4. The gap in life expectancy between women and men of 13.5 years indicates a threat preservation of the nation's gene pool.
18.2. Income of the population in a market economy and principles
their distribution. Measuring inequality in income distribution
One of the main directions of the state's social policy is the development and implementation of rules (legal norms and moral environment), on the basis of which income is generated in society.
Population income – This is money or material assets that come to the disposal of a household (family or citizen) from various sources and are used to meet current needs and accumulate savings.
The formation of a targeted income policy involves a systematic analysis of their dynamics according to various criteria.
By source of receipt income is divided into factor and transfer income.
Factor income(also primary or direct) households receive from the processing or sale of any resources belonging to them, or from any type of activity. The result of such use of resources or type of activity is additionally produced products and services, part of the proceeds from the sale of which the resource owners receive in the form of wages, profits, interest, rent, dividends, rent.
Transfer income(also secondary or indirect) are payments by authorities or a company to a household of money (or the provision of goods and services), in return for which the recipient does not produce additional products or provide additional services. Transfer income is paid in the form of pensions, scholarships, child benefits, unemployment, temporary disability or disability.
Depending on material content, all income is divided into natural and cash, and depending on the method of obtaining – on legal, illegal and criminal.
Regardless of the type, material form and method of receipt, income is assessed in nominal and real terms. Nominal income – This is the amount of money received by a person over a certain period of time. Real income – This is the quantity of goods and services that can be purchased with nominal income at a given price level. To compare the value of nominal income for different periods of time, it is recalculated into real income, taking into account the nature of price changes using the formula
D r = D n / I c,
where D r and D n – the amount of real and nominal income in rubles; And c – price index for the corresponding period of time.
When analyzing income dynamics, it is very important to distinguish between functional and personal distribution. Functional distribution means the division of national income between the owners of various factors of production. In this case, it is determined what share of national income is appropriated by the owners of each type of resource - labor, capital, land, entrepreneurship.
Personal distribution – this is the distribution of national income among the citizens of the country, regardless of what factors they are or, on the contrary, are not the owner of. In this case, the share of national income that falls, for example, on the 10% richest and 10% poorest citizens of the country is determined.
In this regard, the distribution problem arises the dilemma of efficiency and fairness. Its essence lies in the fact that the desire for greater equality (fairness) can result in losses in efficiency for society. For example, increasing funding for social programs, in order to maintain equality and justice, requires increased taxes and their redistribution. If in this way part of the income of, say, Ivanov, is received through a tax by Petrov in the form of benefits, then this will reduce the incentives for work for both. For Ivanov, why work a lot if a significant portion of your earnings will have to be given away in the form of taxes, and for Petrov, why work a lot if there is a decent allowance. There is a danger of undermining incentives for efficient activity, which could lead to a decrease in production activity and a decrease in national income to be distributed. In addition, in the process of income redistribution, losses arise, which are called “leaky buckets” of social assistance. These are losses associated with the expensive bureaucratic system of the administrative apparatus of social bodies. According to the calculations of the famous economist Okun, out of 350 dollars taken from the rich in the form of taxes, 250 dollars. are lost in the process of transfer to the poor. And this is a very big price to pay for equality.
Related to the desire to resolve the dilemma of efficiency and justice is the search for principles of fair distribution, which scientists have been conducting for several centuries. During this time, different concepts of distribution were proposed, but the equalizing and market ones turned out to be practically significant, each of which has its own advantages and disadvantages.
Equalizing concept does not propose to divide the national income equally among all members of society, but proposes to base the distribution on an equal principle for all: for the same labor contribution - equal remuneration. The problem of determining the equivalence of the labor contribution of different types of labor or labor of the same type, but of different quality, has become intractable for this concept. Therefore, the principle of “equal remuneration for equal work” does not exclude inequality in the distribution of national income.
Market concept considers a fair distribution of income based on the competitive mechanism of supply and demand for various resources and activities. This method of distribution was not invented by anyone or specially created, but arose in the process of the evolution of commodity forms of production organization, ensuring only equality of opportunity. At the same time, equality of opportunity is preserved only in conditions of free competition. Meanwhile, as free competition develops, it creates the conditions for its own negation, giving rise to monopoly and oligopoly, along with which equality of opportunity is lost and inequality is generated.
An indisputable fact of a market economy is the uneven distribution of income, to measure the degree of which graphs and coefficients are used. One of the best known ways to measure this inequality is Max Lorentz curve(Fig. 18.1)
Rice. 18.1. Lorenz curve
In the figure, line OA, which is the bisector of a right angle, shows the absolute equality of income distribution, since the points lying on it correspond to equal shares of the population and income. The curve located under the bisector is called the Lorenz curve and shows the actual distribution of income, which is uneven. The further the Lorenz curve deviates downward from the bisector, the greater the degree of unevenness of income distribution.
Quantitatively, the degree of unevenness of income distribution based on the Lorenz curve is measured using Gini coefficient, or income concentration index, the value of which is determined by the formula
Gini coefficient Area of the segment under the bisector
or index = -------------------.
income concentration Area of triangle OAB
In countries with developed market relations, the Gini coefficient is at 0.35. In Russia in 1991, i.e. in the year of the beginning of market reforms, the Gini coefficient was equal to 0.26, and in 2005 – 0.405. This means that over the years of market transformations in the economy, the uneven distribution of income has increased by 1.6 times.
The most common measure of the degree of unevenness of income distribution is decile coefficient, or income differentiation coefficient, the value of which is determined by the formula
Decile coefficient Incomes of the top 10% of the population
or coefficient = ───────────────────────────────.
income differentiation Incomes of the 10% of the population with the lowest incomes
For countries with developed market relations, the value of the decile coefficient is within 6-8 multiples. In Russia, the decile coefficient increased from 13.5 in 1995 to 15 in 2005 and, unfortunately, continues to grow.
The relationship between the amount of income and the number of persons receiving it expresses Pareto distribution law, a graphical interpretation of which is shown in Fig. 18.2.
Fig. 18.2. Pareto distribution law
According to the Pareto distribution law, as the absolute value of income increases, the number of persons receiving the maximum income decreases relatively. Pareto's law is often called the "80/20 law" because 80% of GDP is captured by approximately 20% of the population.
The uneven distribution of income inherent in a market economy forces the state, as a subject whose goal is to create conditions favorable for the development of society, to pursue a policy of income regulation.
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Goals and concept of social policy
An important element of state regulation at the present stage of development is social policy. The market mechanism is not ideal and cannot provide solutions to socio-economic issues.
The relevance of this topic is determined necessity regulation of the socio-economic living conditions of society, its stable development and movement towards a “social economy” model.
The purpose of the topic is to consider the concept, types and functions of state social policy in connection with maintaining incentives for effective economic activity. Traditional educational objectives are complemented by educational ones - the formation of an active position among students in providing the subject with various types of income in the process of economic activity.
This is achieved by setting main problem- how to combine market methods and social guarantees?
The concept “social” (from Latin - public) characterizes everything that is connected with the life and relationships of people in society, with their well-being.
The liberal market economy does not provide a guaranteed level of well-being for all members of society and, as they say, does not have a “conscience.” The market is a socially neutral mechanism for distributing economic resources based on the laws of supply and demand.
The problem with liberal economics is that as wealth increases social inequality is deepening, there is differentiation of incomes of different groups of the population.
In order to update this thesis, we will raise the question of which schools and trends in economic science have emphasized this problem.
For example, Marxism in the 19th century, the Keynesian movement in the 30s. XX century, as a theoretical basis for the implementation of economic policy.
Article 25 of the Universal Declaration of Human Rights, adopted in 1948, states that every person has:
The right to a standard of living, including food, clothing, housing, medical care and necessary social services, as is necessary to maintain the health and well-being of himself and his family;
The right to security in the event of unemployment, illness, disability, widowhood, old age or other loss of livelihood due to circumstances beyond one’s control.
Under the influence of the democratic public, in the second half of the twentieth century, states began to more actively implement economic regulation, including social policy. The market economy received a social orientation and formed new model - mixed economy, implying a guaranteed standard of well-being.
Social policy is a type of government regulation that includes measures to ensure conditions for improving the well-being of society and the stability of relations between social groups.
In a narrow sense, social policy consists of the redistribution of income among various groups of society. In a broad sense, these are measures to create equal starting opportunities for the country's citizens.
The state, through social policy, transformed the market system into a social market economy, in particular in developed countries.
Types and functions of social policy
The implementation of social policy is carried out in each country based on its economic opportunities. Differences across countries are determined mainly by the level of GDP per capita and the size of the state budget.
Different types of economic policies require different financial investments.
Let's highlight the most important types of social policy:
Regulation of income, creation of conditions for labor activity and employment (designed for the economically active population);
Development of social infrastructure in the areas of education, healthcare, housing and communal services, sports and culture (for all citizens of the country);
Social security and social protection (primarily for disabled and low-income citizens).
From the point of view of maintaining market incentives for development, it is the first type of social policy that is the most important. It includes:
Legislative definition, guarantees of working conditions and mechanisms for the development of the labor market, including social partnership, support for small businesses.
Social partnership is a system of relationships between authorities, trade unions, and employers to harmonize interests and mitigate conflicts.
Maintaining the level and effective structure of employment (organization of retraining, benefits for job creation), programs to reduce unemployment;
Creation of employment centers providing free consulting, career guidance services and assistance to unemployed citizens;
Establishment and guarantee minimum wage (minimum wage), periodic review of its size;
Creating conditions for income growth (innovation, quality jobs) in order to reduce their differentiation, that is, differences in the level of income per capita,
Creation of the middle class (60-80% of the population)
The second type of social policy is aimed at creating and developing social infrastructure.
Social infrastructure is a set of industries that serve a person and contribute to the reproduction of all aspects of his life.
The development of social infrastructure in the areas of education, healthcare, housing and communal services, sports and culture is aimed primarily at the development of human capital all citizens countries.
Human capital represents the knowledge and skills accumulated by a person as a result of training and work, which affect the level of his salary, the nature of employment and the possibility of realizing his creative abilities. It is necessary to ensure people's interest in developing their human capital, to increase the proportion of citizens actively aimed at improving the quality of their life and well-being, that is, choosing an active path to combat poverty.
The most expensive type of social policy is the third direction - social security and social protection. It is this direction that is associated with the concept of social policy in the narrow sense of the word. It is aimed, first of all, at organizing direct support for disabled and low-income citizens through the mechanism of income redistribution, and at combating poverty.
The official approach to defining poverty is to compare cash income with the regional subsistence level.
In economic science, the Lorenz Curve model has been developed, which allows you to assess the level of income differentiation of 20 percent groups of the population and more effectively develop measures regulating income distribution (the graph is presented on the presentation slide). By comparing the actual curve with the line of complete equality, the deviation from the equilibrium state can be determined. The closer the Gini index is to 1, the smaller the share of income the poorest people have. It is assumed that as the global average well-being increases, the Gini coefficient in the world will approach the average level of developed countries and will be 0.40.
The state, implementing the function of social protection, creates a social security system based on the principles of compulsory state insurance.
Social Security - a set of socio-economic measures, including the pension system; a system of benefits and compensation for people with low incomes, paid in return for lost earnings; a system of social services for certain groups of citizens.
The main elements of financial sources of social security should be formed on the basis of interaction:
Insurance (compulsory social; corporate). The principle of insurance is most consistent with market approaches, personal contribution and responsibility of subjects.
Social assistance (combination of budget transfers and social services)
Guardianship.
The specific income policy that is developed in different countries based on the analysis of the model is different and depends on many factors, including the level of socio-economic development, the rate of labor productivity, and social tension in society.
Article 7, paragraph 1 of the Constitution of the Russian Federation states: The Russian Federation is a social state, the policy of which is aimed at creating conditions that ensure a decent life and free development of people.
In the Russian Federation since the 90s. development of a social policy model began.
In the 90s the implementation of this model was limited by the modest size of the social “pie”, the state budget deficit, and the oligarchic structure of the economy. So, in the late 90s. in the Russian Federation, the minimum wage (minimum wage) was 10-20% of the subsistence level (the minimum wage in 2000 was 132 rubles, the subsistence minimum was 1210 rubles). As a result of the ongoing policy of ensuring the social quality of economic growth, by 2006. The minimum wage in the Russian Federation reached 1,100 rubles (33% of the subsistence level, 3,382 rubles), by 2009. - 4330 rub. (more than 50%). As of 01.01. 2015 The minimum wage is 5965 rubles. Consistent annual increases in the minimum wage ensure the implementation of Article 133 of the Labor Code of the Russian Federation on the compliance of the minimum wage and the subsistence level.
Justice and development
The concept of “social justice” has many aspects, primarily moral and ethical, and is of a specific historical nature.
The UN study “Equity and Development” evaluates justice in terms of equal opportunities. It is necessary to equalize the circumstances over which subjects have no control, their starting capabilities, and reduce the negative factors that influence the achievement of results.
It is necessary to compensate for the “gaps” of market justice with measures of state social policy.
The social guarantee mechanism should:
Provide benefits and services (free or at a discount) to minimally a sufficient level in order to equalize personal income and maintain social status;
Be based on the prevailing idea of justice in society (equalization or individual differentiation);
Minimize the formation of passive, dependent relationships when it is more profitable not to work (anti-incentives).
An example of a proactive approach to poverty alleviation is the work of 2006 Nobel Prize winner Muhammad Yunus, a banker from Bangladesh who is called the “banker for the poor.” In 1983, he created the Grameen Bank (Bengali for rural bank) with the goal of providing micro-loans (up to $100) to the poorest families and has continued to do so for over thirty years. His model works in more than a hundred countries around the world, helping people escape poverty. Grameen Bank has more than 7 million borrowers, which Yunus believes will help transform the economy. 2005 was designated by the UN as the International Year of Microcredit as an integral part of efforts to achieve development goals.
An important result of social policy and a manifestation of the equalization of living standards is the formation of a middle class, which contributes to the homogeneity of society and an increase in the proportion of citizens actively using “social elevators” and aimed at improving the quality of their life.
“Social elevator” - ways that allow a person to climb the social ladder in order to achieve a high position in society and prosperity.
There are several types of social elevators: obtaining a good education, a career in the government, success in business, a political career, participation in the activities of political parties, scientific activity, creative literary and artistic activity, sports achievements, attracting the attention of the media.
An important task of the modern policy of the Russian Federation is to create conditions for the launch of new social elevators and to increase equal opportunities for their use.
Effective social policies guarantee a standard of well-being. It is based on the principle: “Everyone cannot be rich, but no one should be poor.” In order to preserve market principles and labor motivation of subjects, budget transfers and social partnership opportunities should be combined.
In conclusion, I will quote the 1970 Nobel Prize winner in economics, Paul Samuelson: “Cohesive societies in which various groups of voters provide the population with a comprehensive system of social insurance in the event that anyone may become unemployed, poor, lose health, or become disabled in old age, these societies will ultimately triumph over a society consisting of selfish loners throwing sand into sugar, if only they can fraudulently foist it in a competitive market, over those who are concerned in business life only with their own interests.”
1. Constitution of the Russian Federation, Article 7
2. Universal Declaration of Human Rights.
3. UN World Development Report 2006. Justice and development. Per. from English – M.: ed. “The whole world”, 2006 685s.
4. Course of economic theory: textbook. Ed. Chepurina M.N., Kiseleva E.A. – Kirov: ASA, 2009 - 832 p.
The essence, content, principles of the state’s social policy, its priority directions and main goals. Objects of social policy. Social protection, guarantees and support of the population. The main goals and priorities of social reforms in the Russian Federation.
- Essence, content and principles of social policy
- Priority directions of state social policy
- Social protection, guarantee and support of the population
- The main goals and priorities of social reforms in the Russian Federation
- Literature
1. Address of the President of the Russian Federation to the Federal Assembly on March 6, 1997. Section 3, clause 3.2.
2. Law of the Russian Federation "On the fundamentals of social services for the population in the Russian Federation."
3. Program of social reforms in the Russian Federation for the period 1996-1997.
4. Program of the Government of the Russian Federation "Reforms and development of the Russian economy in 1995-1997".
5. Social policy and labor market: issues of theory and practice. - M., 1996.
6. INTRODUCTION to market economics / Edited by A. Livshits and I. Nikulina. - M., 1994, chapter 13.
7. Fundamentals of a market economy. Ed. V. Kamaeva and B. Domnenko. - M., 1991, ch. 19.
8. Market economy. Textbook. - M.: Somintek, 1992, vol. 1, chapter 14.
9. Textbook on the basics of economic theory. - M., 1994, chapter 16.
10. Market economy. Textbook. - M., 1993, ch. 19.
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